Firm value EBIT DA-$1000 $100 10 Firm value = EBIT DA 10 $500 = $50 10 value of Hertz RAC = $853.4 x 6.47 = $5,521.29 Value of HERC-809.4 x 6.37-5,155.97 SPV 9,455.47 RAC+Value of Hertz HERC+Value of SPV-Total long-term debt 5, 521.29+5, 155.97+9, 455.47-14, 796 $5, 363.66 Equity $5.363.6(, $2.300] , -1 sa 18.5% % This is a five year investment so the IRR is given by, IRR- 1. 2. 3. 4. 5. Using the median car rental EBITDA multiple and median equipment rental EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the mean car rental EBITDA multiple and mean equipment rental EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the Dollar-thrifty EBITDA multiple and United Rentals' EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the Cendant EBITDA multiple and United Rentals' EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. What is the bidding groups average IRR computed using the four scenarios in questions 1 through 4? Firm value EBIT DA-$1000 $100 10 Firm value = EBIT DA 10 $500 = $50 10 value of Hertz RAC = $853.4 x 6.47 = $5,521.29 Value of HERC-809.4 x 6.37-5,155.97 SPV 9,455.47 RAC+Value of Hertz HERC+Value of SPV-Total long-term debt 5, 521.29+5, 155.97+9, 455.47-14, 796 $5, 363.66 Equity $5.363.6(, $2.300] , -1 sa 18.5% % This is a five year investment so the IRR is given by, IRR- 1. 2. 3. 4. 5. Using the median car rental EBITDA multiple and median equipment rental EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the mean car rental EBITDA multiple and mean equipment rental EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the Dollar-thrifty EBITDA multiple and United Rentals' EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. Using the Cendant EBITDA multiple and United Rentals' EBITDA multiple in Exhibit 11 compute the bidding group's expected IRR if the investment is held until 2010. What is the bidding groups average IRR computed using the four scenarios in questions 1 through 4