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Old 11-12-2017, 07:18 PM
SquintRook SquintRook is offline
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Join Date: Nov 2017
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Default anyone can help with this problem?

The Company, Rolling Stock, generated in the last quarter EUR
50m of net income, which is supposed to grow gradually by 5% on annual basis. The Company is
supposed to pay dividend quarterly with 30% pay-out ratio. MC Capital Partners wants to make an
investment in Rolling Stock with 5 year time horizon. The fund intends to acquire 20% stake and assumes
that it will exit the Company selling its stake at 10x P/E multiple based on LTM results.
What is the maximum consideration which MC Capital Partners could pay in order to achieve 10% IRR
on investment?
A. EUR 487m
B. EUR 369m
C. EUR 364m
D. EUR 688m
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