Question
Calculate interest coverage, fixed charge coverage and Debt/EBITDA in year 4. Assume the company was purchased for a 7x multiple at the end of
Calculate interest coverage, fixed charge coverage and Debt/EBITDA in year 4. Assume the company was purchased for a 7x multiple at the end of year 1, financed with 1650 of debt. If the company were sold at the end of year 4 for the same multiple, what would the equity return be? Use the information Yr.1 Yr.4 Revenues 2000 2300 EBITDA 800 900 Debt 1650 1400 Rent 200 200 to answer questions
Step by Step Solution
3.48 Rating (148 Votes )
There are 3 Steps involved in it
Step: 1
To calculate interest coverage we first need to find the interest expense We can find this by subtra...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Auditing A Business Risk Approach
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
8th edition
538476230, 978-0538476232
Students also viewed these Finance questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App