debt principal is reduced to 50% of the original principal, what is the internal rate of return (IRR) of this investment? Multiple Choice 5.71% 12.50% 16.99% 40.00% 25.85%
debt principal is reduced to 50% of the original principal, what is the internal rate of return (IRR) of this investment? Multiple Choice 5.71% 12.50% 16.99% 40.00% 25.85%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:An LBO purchases a business for $250,000,000, 80% of which is debt. In 7 years, the LBO sells it for $350,000,000. If the
debt principal is reduced to 50% of the original principal, what is the internal rate of return (IRR) of this investment?
Multiple Choice
5.71%
12.50%
16.99%
40.00%
25.85%
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