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Year 1 Year 2 EBITDA $7,650 $9,150 Total value of equity $76,500 $82,500 Total firm value $99,450 $132,000 What is value of the entity multiple of Company X in Year 1?
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Year 1 Year 2 EBITDA $7,650 $9,150 Total value of equity $76,500 $82,500 Total firm value $99,450 $132,000 What is value of the entity multiple of Company X in Year 1?

User Eugene Laminskiy
by
4.5k points

1 Answer

3 votes

Answer:

$5.59

Step-by-step explanation:

Calculation to determine the value of the entity multiple of Company X in Year 1

Using this formula

Entity multiple=Market value / EBITDA

Let plug in the formula

Entity multiple=$99,450/$17800

Entity multiple=$5.59

Therefore the value of the entity multiple of Company X in Year 1 will be $5.59

User PovilasB
by
4.4k points
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