Edelman Engines has $17 billion in total assets—of whichcash and equivalents total $100 million. Its balance sheet shows $1.7 billion in current liabilities—ofwhich the notes payable balance totals $1 billion. The firm also has $10.2 billion in long-term debt and$5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock priceis $20 per share. The firm’s EBITDA totals $1.368 billion. Assume the firm’s debt is priced at par, so themarket value of its debt equals its book value. What are Edelman’s market/book and its EV/EBITDAratios?
Edelman Engines has $17 billion in total assets—of whichcash and equivalents total $100 million. Its balance sheet shows $1.7 billion in current liabilities—ofwhich the notes payable balance totals $1 billion. The firm also has $10.2 billion in long-term debt and$5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock priceis $20 per share. The firm’s EBITDA totals $1.368 billion. Assume the firm’s debt is priced at par, so themarket value of its debt equals its book value. What are Edelman’s market/book and its EV/EBITDAratios?
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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Edelman Engines has $17 billion in total assets—of which
cash and equivalents total $100 million. Its
which the notes payable balance totals $1 billion. The firm also has $10.2 billion in long-term debt and
$5.1 billion in common equity. It has 300 million shares of common stock outstanding, and its stock price
is $20 per share. The firm’s EBITDA totals $1.368 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?
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