For the year ending Dec. 31, 2018, MLH Corp. had EBITDA = $8 million, and Net...

50.1K

Verified Solution

Question

Finance

For the year ending Dec. 31, 2018, MLH Corp. had EBITDA = $8million, and Net Income = $4 million. At the time, MLH had debt of$4 million, excess cash of $10 million, and 2 million sharesoutstanding.

A. Suppose that Montastic Inc. (a comparable firm that ispublicly traded) has a P/E ratio of 18. What total equity value andshare price would you then estimate for MLH.

B. Suppose that Montastic Inc. (the comparable firm) has anEnterprise Value/EBITDA multiple of 9.25. What enterprise value andshare price would you then estimate for MLH?

Answer & Explanation Solved by verified expert
3.6 Ratings (626 Votes)
SEE THE    See Answer
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

Transcribed Image Text

For the year ending Dec. 31, 2018, MLH Corp. had EBITDA = $8million, and Net Income = $4 million. At the time, MLH had debt of$4 million, excess cash of $10 million, and 2 million sharesoutstanding.A. Suppose that Montastic Inc. (a comparable firm that ispublicly traded) has a P/E ratio of 18. What total equity value andshare price would you then estimate for MLH.B. Suppose that Montastic Inc. (the comparable firm) has anEnterprise Value/EBITDA multiple of 9.25. What enterprise value andshare price would you then estimate for MLH?

Other questions asked by students