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X company is considering a sale of its electronic division. The division had earnings EBITDA of Rs 550 million in the most recent year (depreciation
X company is considering a sale of its electronic division. The division had earnings EBITDA of Rs 550 million in the most recent year (depreciation was Rs 150 million), growing at an estimated 5% a year (you can assume that depreciation grows at the same rate). The return on capital in the division is 15%, and the corporate tax rate is 40%. If the cost of capital for the division is 9%, estimate the following: a. Value of firm / FCFF multiple. b. Value of firm /EBIT multiple. c. Value of firm /EBITDA multiple
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