Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You are trying to estimate the share price for A&T Inc. You know that A&T will have EBITDA of $50million 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 $50million at the end of the year. In addition, you know that A&T Inc. has $10 million in outstanding debt, no excess cash, and 60 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 | $1,800 | $167 |
II | $2,700 | $233 |
III | $960 | $88 |
IV | $3,400 | $297 |
V | $5,050 | $480 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started