Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Ex. 6 You are analysing the potential acquisition of company Z and need to calculate the enterprise Value EV to revenue multiple RM of company
| Ex. 6 | |||||||||||
| You are analysing the potential acquisition of company Z and need to calculate the enterprise Value EV to revenue multiple RM of company Z considering the following information: | |||||||||||
| Closing share price Z | 63 | EUR per share (at closing day of acquisition date) | |||||||||
| Number of shares outstanding Z | 750 000 | ||||||||||
| Equity of company Z | 3 150 000 | EUR mn | |||||||||
| Debt of company Z | 1 800 000 | EUR mn | |||||||||
| Cash of company Z | 1 350 000 | EUR mn | |||||||||
| Total Annual Revenue | 1 200 000 | EUR mn | |||||||||
| Considering that the industry average ratio EV/ RM (enterprise Value to revenue multiple) is of 7.1x, would you advise the acquisition of company Z? | |||||||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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 Started