ABC Company Ltd $($ABC$)$ is in the process of acquiring XYZ Company Ltd

$($XYZ$).$ As of valuation date, the market value of ABC$$s common stock and

interest$-$bearing debt are $$50$ million and $$16$ million respectively. It$$s net

profit before tax is $$8$ million, interest expense is $$1$ million, depreciation and

amortisation expenses is $$2$ million and tax expense is $$1\mathrm{.}6$ million.

Additionally, the following information of XYZ are also applicable for the

valuation. As of valuation date,

Book value of equity $=$ $$11$ million

Interest$-$bearing debt $=$ $$30$ million

Cash $=$ $$10$ million

Net profit before tax $=$ $$5$ million

Interest expense $=$ $$0\mathrm{.}5$ million

Depreciation and amortisation expense $=$ $$1\mathrm{.}5$ million

Income tax expense $=$ $$1$ million

Assuming all information provided are relevant for consideration as of

valuation date,

A$)$ Determine the Earnings before interest, tax, depreciation and

amortization $($EBITDA$)$ multiple of ABC.

B$)$ Using the EBITDA multiple of ABC as a basis, determine the enterprise

value of XYZ$,$ as of valuation date.

C$)$ Determine the market value of $100\%$ equity interest of XYZ$,$ as of

valuation date.

D$)$ Reconcile the difference between the book value of equity and the

market value of equity determined in part $($c$).$ Explain the reasons for

the difference.