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For the year ending Dec. 31, 2021, MLH Corp. had EBITDA = $8 million, and Net Income = $4 million. At the time, MLH had
For the year ending Dec. 31, 2021, MLH Corp. had EBITDA = $8 million, and Net Income = $4 million. At the time, MLH had debt of $8 million, excess cash of $6 million, and 2.5 million shares outstanding.
A. Suppose that Montastic Inc. (a comparable firm that is publicly traded) has a P/E ratio of 20. What total equity value and share price would you then estimate for MLH.
B. Suppose that Montastic Inc. (the comparable firm) has an Enterprise Value/EBITDA multiple of 10. What enterprise value and share price would you then estimate for MLH?
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