Let's now take a look at the equity returns in the deal. So in order to understand the returns, we need to have an exit strategy or an exit assumption. And in this case, those assumptions can be found at the top. We're looking at a planned exit in year four and using an exit multiple equal to the entry multiple.

Now we're doing that because it's rare for sponsors and investors and investment committees to allow for multiple expansion. So generally, you're gonna consider a multiple that is equal to the going-in multiple. So we're gonna do that here. The way the returns are set up we're gonna calculate the equity value in each of the eight years of the model and then we'll apply the exit multiple as we get into the returns for the various stakeholders below. So the first thing we're gonna do is link to our EBITDA, and that's gonna be found on our income statement. Now, before we start, I should say that just so that we're on the same page, I'm going to base this to start on the first capital structure, which is the standard capital structure. The returns will vary based on the type of structure. So we have our EBITDA in year one and our enterprise value will be the exit multiple and I'll anchor that times the EBITDA. Next, we'll walk the enterprise value bridge from EV to equity value. So we'll start by adding our cash and that's gonna come from the balance sheet and it's gonna come from same thing, column J, year 2016. We'll now subtract the stakeholders that are ahead of the equity holders. So that's gonna be the total debt. And we'll exclude the Mezzanine here. 'Cause we'll handle the Mezzanine separate due to their equity component as well as the preference shares. And I'm gonna subtract first just the total debt, again, separate from the Mezzanine. So that's gonna be the opposite of the sum. And I'm using a minus here just so that we can net these at the end. And I'll go to my balance sheet and I'll take everything beginning with the Revolver and then all of the remaining debt up to the Mezzanine.

And then I'll go and link to the Mezzanine.

And then the preference shares are directly below that. If I take the net of all of these, I'm showing a negative equity value and I'm showing a negative equity value because we haven't been able to generate enough value yet at this point to provide any returns to the residual stakeholders. Now, I should be able to copy these over and what I see is that the equity value begins to grow as EBITDA grows and as we're able to pay down some of the debt as well, generate cash to pay down debt. And we're starting to see some of the return to the equity stakeholders.