Consider a company with $10mm in net income, $100mm in revenue, $5mm in interest expense, $6mm in depreciation and amortization expense. It paid $5mm in taxes. Smart investors believe that similar companies have enterprise values equal to 8.5x EBITDA. The company has $65mm in debt outstanding. It has $20 mm in accounts payable. What do you think smart investors believe the total equity value is? $221mm $136mm $171mm $300mm $156mm $100mm
Consider a company with $10mm in net income, $100mm in revenue, $5mm in interest expense, $6mm in depreciation and amortization expense. It paid $5mm in taxes. Smart investors believe that similar companies have enterprise values equal to 8.5x EBITDA. The company has $65mm in debt outstanding. It has $20 mm in accounts payable. What do you think smart investors believe the total equity value is? $221mm $136mm $171mm $300mm $156mm $100mm
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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Question
Consider a company with $10mm in net income, $100mm in revenue, $5mm in interest expense, $6mm in
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$221mm |
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$136mm |
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$171mm |
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$300mm |
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$156mm |
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$100mm |
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