Calculate the ownership diamond should require given the


Diamond Capital, a private equity firm, plans to invest 6 Million USD in Scana Office, a startup tech firm. Diamond aims for a 50 percent annual rate of return on this risk level of investment. This investment is viewed as a 4 year project for Diamond. Year 4 Digital Office EBITDA is estimated at 8million USD. Scana Office will be 100% equity financed. An EBITDA multiple of 6 is specified by Diamond to be used in valuing Scana Office. Calculate the ownership % Diamond should require, given the 50% target rate of return.

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Financial Management: Calculate the ownership diamond should require given the
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