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Why does the LBO invariably seem to provide a higher valuation?
Why does the LBO invariably seem to provide a higher valuation?

LBO Valuation, Leveraged Buy-out, Higher Value, Valuation, Higher Result, IRR, Financial Projections, Forecast

Updated over 2 years ago

Isn't a higher internal rate of return (IRR) more reasonable, since it lowers the required valuation?
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The results of the LBO are typically a function of free cash flow growth, leverage, exit multiple, and the expected IRR. You can adjust all these inputs on the Financial Projections or the Valuation Tab by clicking on "Change Parameters". The expected IRR can be found at the bottom of the parameters tab (green menu on the left).
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