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JVG Inc., is interested in acquiring Hats R Us, Inc. JVGs CFO has examined similar acquisitions that have occurred in the industry and has found

  1. JVG Inc., is interested in acquiring Hats R Us, Inc. JVGs CFO has examined similar acquisitions that have occurred in the industry and has found that in the recent past acquirers have, on average, offered an enterprise value that is 6x targets forward EBITDA. If Hats R Us current EBITDA is $1.5m and it has $3.45m in debt, how much should JVG offer (per share) for Hats R Us? Assume that Hats R Us EBITDA is expected to grow at 5% indefinitely, and that it has 300,000 acquisition shares.

  1. $5/share
  2. $10/share
  3. $15/share
  4. $20/share
  5. $25/share

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