LBO Modeling Exam – Wall Street
Prep Verified Questions & Answers
Comprehensive Guide for Private Equity Modeling Preparation
Prepared for Wall Street Prep Candidates, 2025
Curated by Financial Modeling Experts
,Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 LBO Modeling Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Question 1: Definition of an LBO . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Question 2: Key Objective of an LBO . . . . . . . . . . . . . . . . . . . . . 4
2.3 Question 3: Sources and Uses Table . . . . . . . . . . . . . . . . . . . . . 5
2.4 Question 4: Internal Rate of Return (IRR) . . . . . . . . . . . . . . . . . . 5
2.5 Question 5: Multiple on Invested Capital (MOIC) . . . . . . . . . . . . . 5
2.6 Question 6: Debt-to-EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Question 7: Cash-Free Debt-Free Basis . . . . . . . . . . . . . . . . . . . . 5
2.8 Question 8: Rollover Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Question 9: Purchase Price Allocation . . . . . . . . . . . . . . . . . . . . 6
2.10 Question 10: Goodwill in LBO . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Question 11: Debt Types in LBO . . . . . . . . . . . . . . . . . . . . . . . . 6
2.12 Question 12: Revolver Functionality . . . . . . . . . . . . . . . . . . . . . 6
2.13 Question 13: Capitalized Financing Fees . . . . . . . . . . . . . . . . . . . 6
2.14 Question 14: EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15 Question 15: Entry Multiple . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.16 Question 16: Exit Multiple . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.17 Question 17: Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.18 Question 18: Debt Amortization . . . . . . . . . . . . . . . . . . . . . . . . 7
2.19 Question 19: Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.20 Question 20: Circularity in LBO Models . . . . . . . . . . . . . . . . . . . 8
2.21 Question 21: Minimum Cash Balance . . . . . . . . . . . . . . . . . . . . 8
2.22 Question 22: Dividend Recapitalization . . . . . . . . . . . . . . . . . . . 8
2.23 Question 23: Management Buyout . . . . . . . . . . . . . . . . . . . . . . 8
2.24 Question 24: Rule of 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.25 Question 25: Ability to Pay Analysis . . . . . . . . . . . . . . . . . . . . . 8
2.26 Question 26: Purchase Premium . . . . . . . . . . . . . . . . . . . . . . . 9
2.27 Question 27: Debt Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.28 Question 28: Equity Contribution . . . . . . . . . . . . . . . . . . . . . . . 9
2.29 Question 29: Exit Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.30 Question 30: Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . 9
3 LBO Modeling Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Basic LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Question 31: Enterprise Value Calculation . . . . . . . . . . . . . . . . . 10
3.3 Question 32: Equity Value Calculation . . . . . . . . . . . . . . . . . . . . 10
3.4 Question 33: Sources of Funds . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Question 34: Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Question 35: Debt-to-EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Question 36: Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Question 37: Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Question 38: Debt Repayment . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Question 39: MOIC Calculation . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Question 40: IRR Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Question 41: Goodwill Calculation . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Question 42: Depreciation from Write-Up . . . . . . . . . . . . . . . . . . 12
1
,LBO Modeling Exam – Wall Street Prep 2025 July 6, 2025
3.14 Question 43: Revolver Draw . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Question 44: Net Debt at Exit . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Question 45: Exit Enterprise Value . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Question 46: Equity Value at Exit . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Question 47: Financing Fees Amortization . . . . . . . . . . . . . . . . . 13
3.19 Question 48: EBITDA Margin . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Question 49: Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . 13
3.21 Question 50: Cash Flow Sweep . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.22 Standard LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.23 Question 51: JoeCo LBO Enterprise Value . . . . . . . . . . . . . . . . . . 14
3.24 Question 52: JoeCo Equity Contribution . . . . . . . . . . . . . . . . . . . 14
3.25 Question 53: JoeCo Debt Structure . . . . . . . . . . . . . . . . . . . . . . 14
3.26 Question 54: JoeCo Interest Expense . . . . . . . . . . . . . . . . . . . . . 14
3.27 Question 55: JoeCo EBITDA Growth . . . . . . . . . . . . . . . . . . . . . . 15
3.28 Question 56: JoeCo FCF Year 3 . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.29 Question 57: JoeCo Debt Repayment . . . . . . . . . . . . . . . . . . . . . 15
3.30 Question 58: JoeCo Exit Value . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.31 Question 59: JoeCo Equity Value at Exit . . . . . . . . . . . . . . . . . . . 15
3.32 Question 60: JoeCo MOIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.33 Advanced LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.34 Question 61: TeaCo Take-Private LBO . . . . . . . . . . . . . . . . . . . . 16
3.35 Question 62: TeaCo Purchase Price . . . . . . . . . . . . . . . . . . . . . . 16
3.36 Question 63: TeaCo Debt Structure . . . . . . . . . . . . . . . . . . . . . . 16
3.37 Question 64: TeaCo Preferred Equity . . . . . . . . . . . . . . . . . . . . . 16
3.38 Question 65: TeaCo Monitoring Fee . . . . . . . . . . . . . . . . . . . . . . 17
3.39 Question 66: Intangible Asset Write-Up . . . . . . . . . . . . . . . . . . . 17
3.40 Question 67: TeaCo Leverage Limit . . . . . . . . . . . . . . . . . . . . . . 17
3.41 Question 68: TeaCo Revenue Growth . . . . . . . . . . . . . . . . . . . . . 17
3.42 Question 69: TeaCo EBITDA Margin . . . . . . . . . . . . . . . . . . . . . 17
3.43 Question 70: TeaCo Exit IRR . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.44 Advanced Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.45 Question 71: Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . 18
3.46 Question 72: Option Pool Dilution . . . . . . . . . . . . . . . . . . . . . . . 18
3.47 Question 73: Dividend Recap Impact . . . . . . . . . . . . . . . . . . . . . 18
3.48 Question 74: Cash Flow Waterfall . . . . . . . . . . . . . . . . . . . . . . . 19
3.49 Question 75: Net Working Capital Adjustment . . . . . . . . . . . . . . . 19
3.50 Question 76: Original Issue Discount . . . . . . . . . . . . . . . . . . . . . 19
3.51 Question 77: Tax Shield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.52 Question 78: LBO Break-Even Point . . . . . . . . . . . . . . . . . . . . . 19
3.53 Question 79: Sensitivity Table . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.54 Question 80: PIK Interest Impact . . . . . . . . . . . . . . . . . . . . . . . 20
3.55 Question 81: Management Earn-Out . . . . . . . . . . . . . . . . . . . . . 20
3.56 Question 82: Add-On Acquisition . . . . . . . . . . . . . . . . . . . . . . . 20
3.57 Question 83: Debt Paydown Priority . . . . . . . . . . . . . . . . . . . . . 20
3.58 Question 84: Exit Share Price . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.59 Question 85: LBO Model Circularity . . . . . . . . . . . . . . . . . . . . . 21
3.60 Question 86: Minimum Equity Ratio . . . . . . . . . . . . . . . . . . . . . 21
3.61 Question 87: Cash Flow from Operations . . . . . . . . . . . . . . . . . . 21
3.62 Question 88: Capex Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.63 Question 89: Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 21
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, LBO Modeling Exam – Wall Street Prep 2025 July 6, 2025
3.64 Question 90: Exit IRR Sensitivity . . . . . . . . . . . . . . . . . . . . . . . 22
4 Case-Based Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1 Question 91: JoeCo Basic LBO . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2 Question 92: JoeCo Debt Repayment . . . . . . . . . . . . . . . . . . . . . 22
4.3 Question 93: JoeCo Exit Value . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.4 Question 94: JoeCo MOIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.5 Question 95: TeaCo Take-Private . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Question 96: TeaCo Preferred Equity . . . . . . . . . . . . . . . . . . . . . 24
4.7 Question 97: TeaCo Leverage Check . . . . . . . . . . . . . . . . . . . . . 24
4.8 Question 98: JoeCo Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.9 Question 99: JoeCo IRR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.10 Question 100: TeaCo Revenue Projection . . . . . . . . . . . . . . . . . . 25
4.11 Question 101: JoeCo Debt Service . . . . . . . . . . . . . . . . . . . . . . . 25
4.12 Question 102: TeaCo Option Pool . . . . . . . . . . . . . . . . . . . . . . . 25
4.13 Question 103: JoeCo Tax Shield . . . . . . . . . . . . . . . . . . . . . . . . 26
4.14 Question 104: TeaCo Dividend Recap . . . . . . . . . . . . . . . . . . . . . 26
4.15 Question 105: JoeCo FCF Impact . . . . . . . . . . . . . . . . . . . . . . . . 26
4.16 Question 106: TeaCo Exit Strategy . . . . . . . . . . . . . . . . . . . . . . . 27
4.17 Question 107: JoeCo Sensitivity Analysis . . . . . . . . . . . . . . . . . . . 27
4.18 Question 108: TeaCo OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.19 Question 109: JoeCo Debt Covenant . . . . . . . . . . . . . . . . . . . . . . 27
4.20 Question 110: TeaCo Share Price Decline . . . . . . . . . . . . . . . . . . 28
4.21 Question 111: JoeCo Revolver Draw . . . . . . . . . . . . . . . . . . . . . 28
4.22 Question 112: TeaCo Monitoring Fee Impact . . . . . . . . . . . . . . . . 28
4.23 Question 113: JoeCo Tax Impact . . . . . . . . . . . . . . . . . . . . . . . . 29
4.24 Question 114: TeaCo Exit Multiple . . . . . . . . . . . . . . . . . . . . . . 29
4.25 Question 115: JoeCo ATP Analysis . . . . . . . . . . . . . . . . . . . . . . . 29
4.26 Question 116: TeaCo Debt Paydown . . . . . . . . . . . . . . . . . . . . . 29
4.27 Question 117: JoeCo Intangible Amortization . . . . . . . . . . . . . . . . 30
4.28 Question 118: TeaCo Share Dilution . . . . . . . . . . . . . . . . . . . . . 30
4.29 Question 119: JoeCo Cash Balance . . . . . . . . . . . . . . . . . . . . . . 30
4.30 Question 120: TeaCo IRR Boost . . . . . . . . . . . . . . . . . . . . . . . . . 31
5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Page 3 of 31
Prep Verified Questions & Answers
Comprehensive Guide for Private Equity Modeling Preparation
Prepared for Wall Street Prep Candidates, 2025
Curated by Financial Modeling Experts
,Contents
1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 LBO Modeling Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Question 1: Definition of an LBO . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Question 2: Key Objective of an LBO . . . . . . . . . . . . . . . . . . . . . 4
2.3 Question 3: Sources and Uses Table . . . . . . . . . . . . . . . . . . . . . 5
2.4 Question 4: Internal Rate of Return (IRR) . . . . . . . . . . . . . . . . . . 5
2.5 Question 5: Multiple on Invested Capital (MOIC) . . . . . . . . . . . . . 5
2.6 Question 6: Debt-to-EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . . 5
2.7 Question 7: Cash-Free Debt-Free Basis . . . . . . . . . . . . . . . . . . . . 5
2.8 Question 8: Rollover Equity . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Question 9: Purchase Price Allocation . . . . . . . . . . . . . . . . . . . . 6
2.10 Question 10: Goodwill in LBO . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Question 11: Debt Types in LBO . . . . . . . . . . . . . . . . . . . . . . . . 6
2.12 Question 12: Revolver Functionality . . . . . . . . . . . . . . . . . . . . . 6
2.13 Question 13: Capitalized Financing Fees . . . . . . . . . . . . . . . . . . . 6
2.14 Question 14: EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.15 Question 15: Entry Multiple . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.16 Question 16: Exit Multiple . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.17 Question 17: Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.18 Question 18: Debt Amortization . . . . . . . . . . . . . . . . . . . . . . . . 7
2.19 Question 19: Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.20 Question 20: Circularity in LBO Models . . . . . . . . . . . . . . . . . . . 8
2.21 Question 21: Minimum Cash Balance . . . . . . . . . . . . . . . . . . . . 8
2.22 Question 22: Dividend Recapitalization . . . . . . . . . . . . . . . . . . . 8
2.23 Question 23: Management Buyout . . . . . . . . . . . . . . . . . . . . . . 8
2.24 Question 24: Rule of 72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.25 Question 25: Ability to Pay Analysis . . . . . . . . . . . . . . . . . . . . . 8
2.26 Question 26: Purchase Premium . . . . . . . . . . . . . . . . . . . . . . . 9
2.27 Question 27: Debt Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.28 Question 28: Equity Contribution . . . . . . . . . . . . . . . . . . . . . . . 9
2.29 Question 29: Exit Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.30 Question 30: Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . 9
3 LBO Modeling Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Basic LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.2 Question 31: Enterprise Value Calculation . . . . . . . . . . . . . . . . . 10
3.3 Question 32: Equity Value Calculation . . . . . . . . . . . . . . . . . . . . 10
3.4 Question 33: Sources of Funds . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.5 Question 34: Uses of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.6 Question 35: Debt-to-EBITDA Ratio . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Question 36: Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.8 Question 37: Free Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Question 38: Debt Repayment . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 Question 39: MOIC Calculation . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Question 40: IRR Estimation . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.12 Question 41: Goodwill Calculation . . . . . . . . . . . . . . . . . . . . . . 12
3.13 Question 42: Depreciation from Write-Up . . . . . . . . . . . . . . . . . . 12
1
,LBO Modeling Exam – Wall Street Prep 2025 July 6, 2025
3.14 Question 43: Revolver Draw . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.15 Question 44: Net Debt at Exit . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Question 45: Exit Enterprise Value . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Question 46: Equity Value at Exit . . . . . . . . . . . . . . . . . . . . . . . 13
3.18 Question 47: Financing Fees Amortization . . . . . . . . . . . . . . . . . 13
3.19 Question 48: EBITDA Margin . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Question 49: Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . 13
3.21 Question 50: Cash Flow Sweep . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.22 Standard LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.23 Question 51: JoeCo LBO Enterprise Value . . . . . . . . . . . . . . . . . . 14
3.24 Question 52: JoeCo Equity Contribution . . . . . . . . . . . . . . . . . . . 14
3.25 Question 53: JoeCo Debt Structure . . . . . . . . . . . . . . . . . . . . . . 14
3.26 Question 54: JoeCo Interest Expense . . . . . . . . . . . . . . . . . . . . . 14
3.27 Question 55: JoeCo EBITDA Growth . . . . . . . . . . . . . . . . . . . . . . 15
3.28 Question 56: JoeCo FCF Year 3 . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.29 Question 57: JoeCo Debt Repayment . . . . . . . . . . . . . . . . . . . . . 15
3.30 Question 58: JoeCo Exit Value . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.31 Question 59: JoeCo Equity Value at Exit . . . . . . . . . . . . . . . . . . . 15
3.32 Question 60: JoeCo MOIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.33 Advanced LBO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.34 Question 61: TeaCo Take-Private LBO . . . . . . . . . . . . . . . . . . . . 16
3.35 Question 62: TeaCo Purchase Price . . . . . . . . . . . . . . . . . . . . . . 16
3.36 Question 63: TeaCo Debt Structure . . . . . . . . . . . . . . . . . . . . . . 16
3.37 Question 64: TeaCo Preferred Equity . . . . . . . . . . . . . . . . . . . . . 16
3.38 Question 65: TeaCo Monitoring Fee . . . . . . . . . . . . . . . . . . . . . . 17
3.39 Question 66: Intangible Asset Write-Up . . . . . . . . . . . . . . . . . . . 17
3.40 Question 67: TeaCo Leverage Limit . . . . . . . . . . . . . . . . . . . . . . 17
3.41 Question 68: TeaCo Revenue Growth . . . . . . . . . . . . . . . . . . . . . 17
3.42 Question 69: TeaCo EBITDA Margin . . . . . . . . . . . . . . . . . . . . . 17
3.43 Question 70: TeaCo Exit IRR . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.44 Advanced Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.45 Question 71: Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . 18
3.46 Question 72: Option Pool Dilution . . . . . . . . . . . . . . . . . . . . . . . 18
3.47 Question 73: Dividend Recap Impact . . . . . . . . . . . . . . . . . . . . . 18
3.48 Question 74: Cash Flow Waterfall . . . . . . . . . . . . . . . . . . . . . . . 19
3.49 Question 75: Net Working Capital Adjustment . . . . . . . . . . . . . . . 19
3.50 Question 76: Original Issue Discount . . . . . . . . . . . . . . . . . . . . . 19
3.51 Question 77: Tax Shield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.52 Question 78: LBO Break-Even Point . . . . . . . . . . . . . . . . . . . . . 19
3.53 Question 79: Sensitivity Table . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.54 Question 80: PIK Interest Impact . . . . . . . . . . . . . . . . . . . . . . . 20
3.55 Question 81: Management Earn-Out . . . . . . . . . . . . . . . . . . . . . 20
3.56 Question 82: Add-On Acquisition . . . . . . . . . . . . . . . . . . . . . . . 20
3.57 Question 83: Debt Paydown Priority . . . . . . . . . . . . . . . . . . . . . 20
3.58 Question 84: Exit Share Price . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.59 Question 85: LBO Model Circularity . . . . . . . . . . . . . . . . . . . . . 21
3.60 Question 86: Minimum Equity Ratio . . . . . . . . . . . . . . . . . . . . . 21
3.61 Question 87: Cash Flow from Operations . . . . . . . . . . . . . . . . . . 21
3.62 Question 88: Capex Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.63 Question 89: Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . 21
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, LBO Modeling Exam – Wall Street Prep 2025 July 6, 2025
3.64 Question 90: Exit IRR Sensitivity . . . . . . . . . . . . . . . . . . . . . . . 22
4 Case-Based Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.1 Question 91: JoeCo Basic LBO . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.2 Question 92: JoeCo Debt Repayment . . . . . . . . . . . . . . . . . . . . . 22
4.3 Question 93: JoeCo Exit Value . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.4 Question 94: JoeCo MOIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.5 Question 95: TeaCo Take-Private . . . . . . . . . . . . . . . . . . . . . . . 23
4.6 Question 96: TeaCo Preferred Equity . . . . . . . . . . . . . . . . . . . . . 24
4.7 Question 97: TeaCo Leverage Check . . . . . . . . . . . . . . . . . . . . . 24
4.8 Question 98: JoeCo Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.9 Question 99: JoeCo IRR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.10 Question 100: TeaCo Revenue Projection . . . . . . . . . . . . . . . . . . 25
4.11 Question 101: JoeCo Debt Service . . . . . . . . . . . . . . . . . . . . . . . 25
4.12 Question 102: TeaCo Option Pool . . . . . . . . . . . . . . . . . . . . . . . 25
4.13 Question 103: JoeCo Tax Shield . . . . . . . . . . . . . . . . . . . . . . . . 26
4.14 Question 104: TeaCo Dividend Recap . . . . . . . . . . . . . . . . . . . . . 26
4.15 Question 105: JoeCo FCF Impact . . . . . . . . . . . . . . . . . . . . . . . . 26
4.16 Question 106: TeaCo Exit Strategy . . . . . . . . . . . . . . . . . . . . . . . 27
4.17 Question 107: JoeCo Sensitivity Analysis . . . . . . . . . . . . . . . . . . . 27
4.18 Question 108: TeaCo OID . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.19 Question 109: JoeCo Debt Covenant . . . . . . . . . . . . . . . . . . . . . . 27
4.20 Question 110: TeaCo Share Price Decline . . . . . . . . . . . . . . . . . . 28
4.21 Question 111: JoeCo Revolver Draw . . . . . . . . . . . . . . . . . . . . . 28
4.22 Question 112: TeaCo Monitoring Fee Impact . . . . . . . . . . . . . . . . 28
4.23 Question 113: JoeCo Tax Impact . . . . . . . . . . . . . . . . . . . . . . . . 29
4.24 Question 114: TeaCo Exit Multiple . . . . . . . . . . . . . . . . . . . . . . 29
4.25 Question 115: JoeCo ATP Analysis . . . . . . . . . . . . . . . . . . . . . . . 29
4.26 Question 116: TeaCo Debt Paydown . . . . . . . . . . . . . . . . . . . . . 29
4.27 Question 117: JoeCo Intangible Amortization . . . . . . . . . . . . . . . . 30
4.28 Question 118: TeaCo Share Dilution . . . . . . . . . . . . . . . . . . . . . 30
4.29 Question 119: JoeCo Cash Balance . . . . . . . . . . . . . . . . . . . . . . 30
4.30 Question 120: TeaCo IRR Boost . . . . . . . . . . . . . . . . . . . . . . . . . 31
5 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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