Question
Realistically, valuations are based on multiple ranges. This gives rise to Enterprise Valuation ranges. To derive the Equity Value, Debt must be subtracted from Enterprise
Realistically, valuations are based on multiple ranges. This gives rise to Enterprise Valuation ranges. To derive the Equity Value, Debt must be subtracted from Enterprise Value. To Estimated the Implied Share Price, divide Equity Values by Fully Diluted Shares Outstanding.
Suppose comparable ranges for the EBITDA Multiplier is 6.8 to 7.4; Target EBITDA is $40, target Debt is $90M and there are 20M fully diluted shares outstanding. PLEASE SHOW WORK.
a. Compute the range of Enterprise Values.
b. Compute the range of Equity Value.
c. Compute the Implies Share Price.
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Case Studies in Finance Managing for Corporate Value Creation
Authors: Robert F. Bruner, Kenneth Eades, Michael Schill
7th edition
007786171X, 77861711, 978-0077861711
