20. There are many ways to estimate the value of a company. The EBITDA Multiplier Method is one way. Suppose you are valuing a solar cell company and the companies in the table below are comparable to the company being valued. Compute the EBITDA Multiplier for the solar cell industry. Adjusted Net Company Sales EBITDA Market Cap Income Bob's Solar $500 $110 $20 $400 Sun Silicon $180 $90 $50 $200 Sun Electric $520 $200 $50 $600 Totals $1,200 $400 $130 $1,200

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20. There are many ways to estimate the value of a company. The EBITDA Multiplier Method is one way. Suppose you are
valuing a solar cell company and the companies in the table below are comparable to the company being valued.
Compute the EBITDA Multiplier for the solar cell industry.
Adjusted Net
Company
Sales
EBITDA
Market Cap
Income
Bob's Solar
$500
$110
$20
$400
Sun Silicon
$180
$90
$50
$200
Sun Electric
$520
$200
$50
$600
Totals
$1,200
$400
$130
$1,200
O 3.00
O 667
O 6.00
O 0.333
Transcribed Image Text:20. There are many ways to estimate the value of a company. The EBITDA Multiplier Method is one way. Suppose you are valuing a solar cell company and the companies in the table below are comparable to the company being valued. Compute the EBITDA Multiplier for the solar cell industry. Adjusted Net Company Sales EBITDA Market Cap Income Bob's Solar $500 $110 $20 $400 Sun Silicon $180 $90 $50 $200 Sun Electric $520 $200 $50 $600 Totals $1,200 $400 $130 $1,200 O 3.00 O 667 O 6.00 O 0.333
12. Peter Jamison is looking for a buyer for his company Jamison Electronics. Megatron Corporation has offered him $25
million. However, Megatron wants Jamison to guarantee that sales will not drop below last year's sales for three years.
If sales drop, Megatron wants to reduce the price of the company $2 for each $1 of drop in sales. Megatron wants to
hold $15 million of the sale price in escrow as a hedge against a sales decline. Of course, Jamison doesn't want to have
to guarantee how effective Megatron's sales force will be. Two other companies have offered to buy Jamison. United
Technologies has offered a $21 million cash. Allison Industries has offered $19 million of its stock. If Jamison can't get
Megatron to drop its sales guarantee requirement, what is Jamison's BATNA?
O Sell the company to his own employees.
O Sell to United Technologies.
Sell to Allison Industries.
Sell to Jamison Electronics.
Transcribed Image Text:12. Peter Jamison is looking for a buyer for his company Jamison Electronics. Megatron Corporation has offered him $25 million. However, Megatron wants Jamison to guarantee that sales will not drop below last year's sales for three years. If sales drop, Megatron wants to reduce the price of the company $2 for each $1 of drop in sales. Megatron wants to hold $15 million of the sale price in escrow as a hedge against a sales decline. Of course, Jamison doesn't want to have to guarantee how effective Megatron's sales force will be. Two other companies have offered to buy Jamison. United Technologies has offered a $21 million cash. Allison Industries has offered $19 million of its stock. If Jamison can't get Megatron to drop its sales guarantee requirement, what is Jamison's BATNA? O Sell the company to his own employees. O Sell to United Technologies. Sell to Allison Industries. Sell to Jamison Electronics.
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