Question
ABC Industries has $17,500,000,000 in total assetsof which cash and equivalents total $190,000,000. Its balance sheet shows $2,000,000,000 in current liabilitiesof which the notes payable
ABC Industries has $17,500,000,000 in total assetsof which cash and equivalents total $190,000,000. Its balance sheet shows $2,000,000,000 in current liabilitiesof which the notes payable balance totals $800,000,000. The firm also has $9,250,000,000 in long-term debt and $6,250,000,000 in common equity. It has 250 million shares of common stock outstanding, and its stock price is $20 per share. The firms EBITDA totals $2,122,857,143. Assume the firms debt is priced at par, so the market value of its debt equals its book value. What is ABCs EV/EBITDA ratio?
a. 2.94
b. 4.73
c. 5.85
d. 7.00
e. 7.68
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