Question

A company has a d/e of 1.25. as per the balance sheet, the outstanding debt is rs.10000 bearing an interest rate of 10%  the cash and cash equivalent is rs.1250  the net income of the company is rs.1600 and the tax rate is 30%  the depreciation and amortization amount is rs.500.  calculate the ev/ebitda of the company.  consider the book value of equity same as the market value of equity of the company.

Answer 1

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Answer 2

Answer:

4.42

Explanation:

D/E=1.25           TAX 30%

D 10000           INT 10%

CASH 1250   NET INCOME 1600

Dep 500    

   

EAT 1600    

EBT 2285.714286    

EBIT 3285.714286  INT 1000

EBITDA 3785.714286    

   

EQUITY 8000    

EV 16750    

4.424528302