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JJB, a private equity firm, acquired Geozone on December 31, 2016, a company with last twelve months (LTM) EBITDA of $882.7 million at an 8.0x
JJB, a private equity firm, acquired Geozone on December 31, 2016, a company with last twelve months (LTM) EBITDA of $882.7 million at an 8.0x LTM EBITDA multiple. EBITDA will grow by 8% annually for the next 5 years. Immediately prior to the acquisition, Geozone had debt of $50.0 million and cash of $20.0 million. Debt and cash balances remained unchanged through the next 5 years.
Assuming a sale on December 31, 2021 at an 8x multiple, how much equity would be created in the acquisition?
A) 3,314.20
B) 10,345.8
C) 3,344.2
D) 7,031.6
E) 3,319.2
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