Given that

Enterprise value = MV of equity +MV of debt- cash and investment;

EBITDA = Net Income + Interest expense +Depreciation and Amortization +Tax Expense

Suppose for a company

Net income = $34.0 million

Interest expense = $7.62 million

Cash outflow for interest (Coupon) expense = $4.0 million

Marginal tax rate = 25%

Cash and marketable securities = 8.9 million

Investments = $6.2 million

Price per common share = $13.8

Total number of shares issued = 200,000,000

Total number of shares in treasury stock: 1,320,000

Further information based on companys financial statement:

The companys only interest-paying liability assumed by the company is a 5-year $200 million note maturing in 3 years time and currently trading at 4.13%. The note is paying semi-annual coupons and all interest payments have been met so far.

The company also has preferred stock that is not trading in any exchange. The book value of the preferred stock is $45 million. No preferred dividends are currently in arrears.

Find EV/ EBITDA. (Hint: Look around slides 48-50, Chapter 9, may need to review bond, common stock, and preferred stock pricing)