Question
You have conducted a comparable companies analysis and identified the following four firms as tier 1 peer firms: Enterprise Value EBITDA Company A $9,282 $1,020
You have conducted a comparable companies analysis and identified the following four firms as tier 1 peer firms:
|
| Enterprise Value | EBITDA |
| Company A | $9,282 | $1,020 |
| Company B | 4,740 | 600 |
| Company C | 2,700 | 450 |
| Company D | 1,000 | 125 |
Assume your target firm has EBITDA of $500. Based on the characteristics of the firms, the key trading multiple is EV/EBITDA. What is the implied Enterprise Value of the target firm if you use the average trading multiple of tier 1 comparable firms to estimate the target's valuation?
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