Please answer the following questions in Excel: -An analyst has researched the E

Question

Please answer the following questions in Excel:

-An analyst has researched the EV/EBITDA multiples of comparable firms to a company they are preparing a research note about, Intangible Ltd. The comps are:

EV/EBITDA multiple

Firm X                                   12.1

Firm Y                                    9.8

Firm Z                                    10.3

You can assume that all these firms are comparable to Intangible Ltd. in all relevant respects (industry, size, etc…). Intangible Ltd. has EBITDA of $213m, net debt of $1.1b, and 40m shares outstanding. How much is Intangible Ltd.’s equity worth on a per share basis?

Explanation / Answer

Using Average EV/EBITDA multiple from X,Y&Z=(12.1+9.8+10.3)/3=10.73

So, EV=Average EV/EBITDA*EBITDA=10.73*213=2285.49 Million=$2.28549 Billion

Net Debt=$1.1 Billion

So, Equity=Enterprise Value-Net Debt=2.28549-1=$1.28549 Billion

Equity per share=1.28549 billion/40 million=$32.137

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