Question

A firm has an EBIT of $41,300, depreciation of $1,200, interest of $850, and taxes of $210. The EBITDA multiple is 9.6. What is the value of the firm?

Answer 1

$408,000

Step-by-step explanation:

For computing the value of the firm, first we have to determine the EBITDA which is shown below:

EBITDA = EBIT + Depreciation

= $41,300 + $1,200

= $42,500

And, the value of the firm would be equal to

Value of firm = EBITDA × EBITDA multiple

= $42,500 × 9.6

= $408,000