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Intermediate

A sponsor doubles its equity investment over a five year hold. Approximately what IRR does a 2.0x MOIC over five years imply?

  1. A. About 20 percent
  2. B. About 15 percentCorrect
  3. C. About 25 percent
  4. D. About 10 percent

Takeaway. 2x over five years compounds to about 15 percent a year, an anchor pair worth knowing by heart.

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