Question
You are analyzing Company A and Company B in order to value both companies subordinated unsecured bonds and stock. Companies A and B are in
You are analyzing Company A and Company B in order to value both companies subordinated unsecured bonds and stock. Companies A and B are in the same industry. Company As and Bs LTM EBITDA is $650 million and $725 million, respectively. Company As stock is currently trading at $9.00/share; Company Bs stock is trading at $2.50/share
To accomplish the valuation, you collect the following data on other companies in the same industry.
(in millions)
TEV | LTM EBITDA | |
Company C | 2,478.45 | 391.9 |
Company D | 6,784.8 | 1,524.7 |
Company E | 6,226.48 | 1,197.4 |
Company F | 1,575 | 225 |
What is the value of Company As stock and subordinated bonds given the capital structure below?
(in millions)
Company A's Cap Structure | |
First Senior Secured Bank Debt | 600 |
Second Lein Senior Secured Bonds | 425 |
Senior Unsecured | 500 |
Sebordinated Unsecured Bonds | 750 |
Common Shares Outstanding | 125 |
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