• anonymous
Can anyone help me solve this... Q.3 A firm has reached an agreement with target acquisition to use a comparable firms EBITDA multiple in determining the targets multiple. The comparable firm has similar profitability measures but differing growth rates and cost of capital. Comparable Firm Mebitda 18 WACC 15% Growth 8% Target Firm WACC 18% Growth 6% Given the Comparable Firm’s and the Target’s financial data in the Table estimate the Mebitda ( EBITDA Multiple for the Target firm ) Thanks in advance.............
  • Stacey Warren - Expert
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  • jamiebookeater
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  • Owlfred
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  • anonymous
no sorry
  • anonymous
you need to run a regression where u use as independent variables, tax,depreciation,reinvestment rate,growth and beta(systematic risk). the dependent should be Enterprise value/EBITDA . When u obtain the regression coefficients plug those numbers that belong to your firm to get the target EV/EBITDA ratio.

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