In 2018, Chevelle Company has sales of $39,500, cost of $18,400,
and depreciation of
$1,900 and interest expense of $1,400. Its tax rate is 35%. It
has a stock market value
of $250,000 and debt borrowing of $100,000. It has little cash
on balance sheet and
pays a dividend of $3,470 in 2018.
a) Construct an income statement;
b) What’s the retained earnings?
c) What’s its EBITDA?
d) What’s its Enterprise Value (EV)?
e) What’s its EV /EBITDA valuation?