1. A public companys share price as of the valuation date is $15/share. The company has 1 million shares outstanding. The company reported current debt of $500,000 and long-term debt of $1,300,000:

1. What is the companys enterprise value, if it has cash of $600,000? Show the calculations and result (5 points):
2. The company reported EBITDA for the last 12-month period of $1,600,000 and the consensus among equity analysts that cover the companys stock is that the companys EBITDA for the next 12-month period will be 5% higher. Calculate the companys trailing and forward enterprise value/ EBITDA multiples. Show both calculations (5 points):

3. Using the projected next period growth of 5% and the forward multiple calculated in the previous step, determine the companys implied cost of capital. Show your calculations (5 points):

d. You are valuing a private company, PrivateCo, Inc., that is similar to, but much smaller than, the aforementioned public company. The private companys cost of capital is 6% higher than that of the public company, but the private companys EBITDA is expected to grow at 7% next year. Calculate the enterprise value/ EBITDA multiple that would be appropriate for the subject private company. Show your calculations (5 points):

2. You are satisfied that the enterprise value / EBITDA multiple for PrivateCo, Inc. that you calculated in the previous step is appropriate. PrivateCo, Inc. expects next year EBITDA to be $100,000, and currently has debt of $200,000 and cash of $80,000:

1. You are tasked with valuing a 60% equity interest in PrivateCo, Inc. on a controlling, marketable basis. Using the enterprise value/ EBITDA multiple calculated in the previous step and information about PrivateCo, Inc. provided above, determine the value of the 60% equity interest in the company. For purposes of your calculations, assume the subject interest warrants a control premium of 15%. Show your calculations (5 points):

b. You have also been asked to determine the fair market value of a 20% equity interest in PrivateCo, Inc. on a minority, nonmarketable basis. Using the enterprise value/ EBITDA multiple calculated in the previous step and information about Private Co, Inc. provided above, determine the value of the 20% equity interest in the company. For purposes of your calculations, assume the subject interest warrants a discount for lack of control of 10% and a discount for lack of marketability of 20%. Show your calculations (5 points):