Question
You are trying to estimate the share price for A&T Inc. You know that A&T will have EBITDA of $200million at the end of the
You are trying to estimate the share price for A&T Inc. You know that A&T will have EBITDA of $200million at the end of the year. In addition, you know that A&T Inc. has $100 million in outstanding debt, no excess cash, and 75 million outstanding shares. You have collected the following information on publicly traded comparable firms (see table below). Using the average Enterprise Value to EBITDA ratio of comparable firms, what is the best estimate of A&T's share price? Select one.
| Firm | Enterprise Value (in $ millions) | EBITDA1 (in $ millions) |
| I | $3,100 | $489 |
| II | $1,590 | $277 |
| III | $2,230 | $347 |
| IV | $180 | $35 |
| V | $390 | $67 |
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Cost Accounting A Managerial Emphasis
Authors: Charles T. Horngren, Srikant M.Dater, George Foster, Madhav
13th Edition
8120335643, 136126634, 978-0136126638
