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Next question. A company has $1bn revenue in YR0 and 10% CAGR with a 10% constant EBITDA margin. It was purchased at 10x EV/EBITDA, with 4x EBITDA of debt and no interest. Assume that the company was sold at $1.3bn at year 3 and that it pays back $100mm of the debt after each year. How much equity does the financial sponsor have at the end of year 3?

A company has $1bn revenue in YR0 and 10% CAGR with a 10% constant EBITDA margin. It was purchased at 10x EV/EBITDA, with 4x EBITDA of debt and no interest. Assume that the company was sold at $1.3bn at year 3 and that it pays back $100mm of the debt after each year. How much equity does the financial sponsor have at the end of year 3?

Start with the one-sentence answer an interviewer expects, then support it with the two or three drivers that actually move the number. Anchor every claim to a mechanism, not a memorized phrase.

Intuition

Interviewers are testing whether you can connect the concept to how the business actually earns and spends cash. Walk the logic in the order the money moves, and say what would change your answer.

Watch

The classic trap is reciting a definition and stopping. Strong candidates flag the edge cases, name the assumption they would sanity-check first, and keep units and signs consistent all the way through.

Deep Dive

Lay out the calculation step by step, state the inputs you would need, and finish by tying the result back to the original question so the interviewer hears a complete loop.