Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. as before, company a has ebitda of $110 million an

As before, Company A has EBITDA of $110 million and debt of $30 million, assuming...

70.2K

Verified Solution

Question

Finance

As before, Company A has EBITDA of $110 million and debt of $30 million, assuming it has no cash. The total enterprise value of the company is at 3x EBITDA. A growth equity fund invests $200 million of new capital in Company A. Seven years later, the PE firm exits this investment when the enterprise value reaches $960 million; outstanding debt at exit is $60 million.

Which one of the following changes to the company can explain this increase in the value of the company?

Increase of the multiple from 3x to 9x

Increase in net debt from $30 million to $60 million

Decrease of the EBITDA from $110 million to $50 million

Increase of the EBITDA from $110 million to $320 million

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Biology
1.2K views

An acute viral disease infects a population of chipmunks, and only those homozygous for allele b...

Mechanical Engineering
1.2K views

If the weight of the contents in a vessel is measured and the density of the...

Physics
1.2K views

A paramagnetic salt contains 1028 ions m with magnetic moment of one Bohr magneton Calculate...

Physics
1.2K views

The resistance of the wire in platinum resistance thermometer at ice point is 3 2...

Geometry
1.2K views

State two other ways to name Zx T y X U

Statistics
1.2K views

Recall that the notation N represents a combination of n objects chosen from a larger...

Calculus
1.2K views

f x Start by drawing the vertical and horizontal asymptotes Then plot the intercepts if...

Algebra
1.2K views

Solve the equation 9d 27d 18 0 0 2 1 01 1 1 O 2...

Accounting
1.2K views

ata concerning Wang Corporation's single product appear below: (Do not round your intermediate calculations.) Selling...

Accounting
1.2K views

Lucern Company reports the following for its overhead cost for the year. 1. Compute the...

Accounting
1.2K views

Accounting
1.2K views

Bartleby Corporation is undergoing liquidation under Chapter 7 of the bankruptcy code. Bartleby reports total...