Adler Industries has $3,125,000,000 in total assets of which cash and equivalents total $75,000,000. Its balance sheet shows $425,000,000 in current liabilities of which the notes payable balance totals $187,500,000. The firm also has $1,200,000,000 in long-term debt and $1,500,000,000 in common equity. It has 80 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $1,656,250,000. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What is Adler's EV/EBITDA ratio? (Note: You may want to refer to the Summary of Ratios worksheet in Module 1 on the course's canvas website.) a. 2.00 b. 2.55 c. 3.00 d. 3.44 4.00

Adler Industries has $3,125,000,000 in total assets of which cash and equivalents total $75,000,000. Its balance sheet shows $425,000,000 in current liabilities of which the notes payable balance totals $187,500,000. The firm also has $1,200,000,000 in long-term debt and $1,500,000,000 in common equity. It has 80 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $1,656,250,000. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What is Adler's EV/EBITDA ratio? (Note: You may want to refer to the Summary of Ratios worksheet in Module 1 on the course's canvas website.) a. 2.00 b. 2.55 c. 3.00 d. 3.44 4.00

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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CEG Capital Inc. is a large holding company that uses long-term debt extensively to fund its operations. At December 31, the company reported total assets of $100 million, total debt of $55 million, and total equity of $45 million. In January, the company issued $11 billion in long-term bonds to investors at par value. This was the largest debt issuance in the company’s history, and it significantly increased the company’s ratio of total debt to total equity. Five days after the debt issuance, CEG filed legal documents to prepare for an additional $50 billion long-term bond issue. As a result of this filing, the price of the $11 billion in bonds that the company issued earlier in the week dropped to 94 because of the increased risk associated with the company’s debt. The investors in the original $11 billion bond issuance were not informed of the company’s plans to issue additional debt so quickly after the initial bond issue.Did CEG Capital act unethically by not disclosing to initial…
Landers Nursery and Garden Stores has current assets of $319,000 and fixed assets of $225,000. Current liabilities are $112,000 and long-term liabilities are $179,000. There is $40,000 in preferred stock outstanding and the firm has issued 25,000 shares of common stock.
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Edelman Engines has $13 billion in total assets- of which cash and equivalents total $100 million. Its balance sheet shows $2.6 billion in current liabilities- of which the notes payable balance totals $1.03 billion. The firm also has $6.5 billion in long-term debt and $3.9 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price is $25 per share. The firm's EBITDA totals $1.05 billion. Assume the firm's debt is priced at par, so the market value of its debt equals its book value. What are Edelman's market/book and its EV/EBITDA ratios? Do not round intermediate calculations. Round your answers to two decimal places. M/B: EV/EBITDA:
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