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Question
Cervil had an EBIT of $247 million in the last fiscal year. Its depreciation and amortization expenses amounted to $84 million. The firm has 135 million shares outstanding and a share price of $12.80. A competing firm that is very similar to Cervil has an enterprise value/EBITDA multiple of 5.40. What is the enterprise value of Cervil? (Round to the nearest million dollars.)A) $1,334 million
B) $453 million
C) $1,787 million
D) $1,315 million
Answer
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Related questions
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Q:
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The claim lenders' hold on cash flows in a company with outstanding risky debt is often thought of as:
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B) holding a put option on the firm's assets.
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Q:
Bifive Homes, Inc., is a developer of planned residential communities. It has entered into an option contract with a land owner outside Austin, Texas. It will pay the land owner $100,000 for the option to buy the land in two years at a price of $20 million. During that time Bifive Homes will evaluate population and real estate trends in Austin. Its plan is to buy the land if real estate prices in Austin increase enough that developing the land would be worth more than the $20 million price. The $20 million purchase price resembles:
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Q:
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C) the stockholders default and the lenders receive the value of the firm.
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Q:
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Q:
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Q:
Which of the following statements is true of a call option?
A) The value of a call option can never be positive.
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Q:
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A) True
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A) True
B) False
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If a firm adds financial options to its debt securities, it will increase the interest expense to the firm.
A) True
B) False
Q:
Consider a call option on a stock with a strike price of $60. If the stock price at expiration is $50, the payoff from the call option is $10.
A) True
B) False