Question 41 of 50 On December 30, 2013: Company Y trades at $10 per share Enterprise Value /EBITDA multiple of 5.0x Leverage ratio of 0.6x (Net debt/EBITDA) 2007 EBITDA- $2.0 billion Assume no cash on company Y's balance sheet On December 31, 2013: Company Y undergoes an LBO and is recapitalized The company's new leverage ratio becomes 5.0x Financial sponsor exit is planned for Year 5. Assume that the EV/ EBITDA multiple at exit year is the same as the current multiple Required rate of return is 25% Exit year EBITDA projected to be $3.0 billion The company's leverage ratio at exit is 1.6x What is the implied Equity Value in the exit yeart $6.0 billion $7.5 bilion $8.0 billion $10.2 billion Question 41 of 50 On December 30, 2013: Company Y trades at $10 per share Enterprise Value /EBITDA multiple of 5.0x Leverage ratio of 0.6x (Net debt/EBITDA) 2007 EBITDA- $2.0 billion Assume no cash on company Y's balance sheet On December 31, 2013: Company Y undergoes an LBO and is recapitalized The company's new leverage ratio becomes 5.0x Financial sponsor exit is planned for Year 5. Assume that the EV/ EBITDA multiple at exit year is the same as the current multiple Required rate of return is 25% Exit year EBITDA projected to be $3.0 billion The company's leverage ratio at exit is 1.6x What is the implied Equity Value in the exit yeart $6.0 billion $7.5 bilion $8.0 billion $10.2 billion