Question
ABC Corporation is purchasing DEF Corp using an asset swap so that it is tax-free to the owners of DEF Corp. DEF's EBITDA is
ABC Corporation is purchasing DEF Corp using an asset swap so that it is tax-free to the owners of DEF Corp. DEF's EBITDA is 145.5 million and the price that ABC pays is 6 times EBITDA. If the owners of DEF Corp. have a tax rate of 20.5%, what is the equivalent price in millions if DEF is sold to a cash buyer?
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The price that ABC pays to DEF Corp is 6 times its EBITDA or 1455 million 6 873 mi...Get Instant Access to Expert-Tailored Solutions
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