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Can you knock this one within an hour? Let me know as soon as possible. TCO F) Harman Electrical Engineering (HEE) has developed a ground-breaking
Can you knock this one within an hour? Let me know as soon as possible.
TCO F) Harman Electrical Engineering (HEE) has developed a ground-breaking new robotics technology already in use to build major civil engineering construction projects around the country. The firm is privately held and there is no public market for its common stock. HEE's 2012 EBIT was $3.9 million. The firm's year-end 2012 accumulated depreciation balance was $1.1 million; at the end of 2011, that balance was $800,000. At the end of 2012, HEE had total liabilities of $4.4 million, which included a $2.6 million loan balance, and the firm's total shareholders' equity balance was $1.6 million. The CEO has asked you to determine the value of HO's equity. Your research reveals that BridgeTech is a public company that develops robotics software for largescale manufacturing operations. BridgeTech's share price is $120 and the firm has 500,000 shares outstanding. BridgeTech also has $15 million in bonds outstanding, and its EBITDA is $18.75 million. Make sure to provide all calculations in your answers to each of the following questions: Required: (a) Calculate BridgeTech's enterprise value and EBITDA multiple. (b) Calculate Harman Electrical Engineering's EBITDA. (c) After completing (a) and (b) above, use BridgeTech's EBITDA multiple to determine HEE's implied Enterprise Value and its estimated equity value. (Points : 30)Step by Step Solution
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