You are comparing the valuations of two tecnology firms and have come up with the following information:

Bumble reported EBITDA of $ 178 million last year. The firm had 142 million shares outstanding trading at $ 55 a share and $ 2.75 billion in debt outstanding. The company expects earnings to grow 28% a year for the next 5 years.

Tinder reported EBITDA of $ 151 million last year. The firm had 75 million shares trading at $ 98 a share, $ 2.8 billion in debt and $ 26 million as a cash balance. The company has a 30% tax rate but you do not know the expected growth rate in earnings.

Running a regression of EV/EBITDA multiples across dating companies, you have arrived at the following results: EV/EBITDA= 7.5 2.40 (Tax rate in percentage, e.g. 20% enter as 20) +6.50 (Expected earnings growth rate: next 5 years in percentage, e.g. 5% enter as 5)

1) If Bumble is correctly valued, relative to the sector, estimate the tax rate that the company faces?

2) If Tinder is under valued by 8 % relative to the sector, estimate the expected growth in earnings in the next 5 years?