Chartered Investment Manager (CIM) Practice Exam · Question
A Canadian private equity firm is looking to exit an established operating company seven years after its initial investment. The firm invested $50 million and the company is now valued at $200 million. If the firm incurred $10 million in management fees over the period and paid no carried interest yet, what is the Gross Multiple on Invested Capital (MOIC) for this investment?
The Gross Multiple on Invested Capital (MOIC) is calculated as the total value received from the investment divided by the total capital invested, before fees a
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Question: A Canadian private equity firm is looking to exit an established operating company seven years after its initial investment. The firm invested $50 million and the company is now valued at $200 million. If the firm incurred $10 million in management fees over the period and paid no carried interest yet, what is the Gross Multiple on Invested Capital (MOIC) for this investment?
Answer options: ✅ 4.0x
- 3.8x
- 3.0x
- 2.8x
Correct answer: 4.0x
Explanation: The Gross Multiple on Invested Capital (MOIC) is calculated as the total value received from the investment divided by the total capital invested, before fees and carried interest. Here, $200 million / $50 million = 4.0x. Management fees would impact the net MOIC.
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