A target was purchased for $1.5 billion with an equity contribution of 500 million. By...
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Finance
A target was purchased for $1.5 billion with an equity contribution of 500 million. By year 5 no debt has been repaid and enterprise value has grown by $500 million. Assuming the sponsor sells the target for its enterprise value, what is the sponsors cash return?
The answer is 2x cash return, but why?
Thank you
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