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

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

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

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

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 8 months ago
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