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Damm [24]
1 year ago
14

The director of research has asked you to produce a pro forma valuation of a target company using leveraged buyout analysis. A c

ompany has $260 million of EBITDA. The transaction purchase price is 8.5 times EBITDA, and the equity contribution is 20%. If the transaction is completed, what will be the debt-to-EBITDA ratio
Business
1 answer:
statuscvo [17]1 year ago
4 0

6.8  will be the debt-to-EBITDA ratio.

EBITDA* 8.5=Transaction Value

(Transaction value * 0.8) / EBITDA = 6.8

EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company's overall financial performance and is used as an alternative to net income in certain circumstances. However, EBITDA can be misleading because it does not reflect the cost of capital investments such as property, plant, and equipment.

This metric also excludes debt-related expenses by adding interest and tax costs to revenues. However, it is a more accurate measure of business performance as it is able to report profit before the effect of accounting and financial deductions.

Learn more about the debt-to-income ratio here: brainly.com/question/24814852

#SPJ4

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Martin purchased municipal bonds that yield 7% annually and certificates of deposit which yield 9% annually.
jeka94

Answer:

the amount invested in municipal bond is $8,000

the amount invested in certificated on deposits = $11,000 - $8,000

= $3,000

Explanation:

Data provided in the question:

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Annual yield on certificated of deposits = 9% = 0.09

Initial investment = $11,000

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Let the amount invested in municipal bond be 'x'

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the amount invested in certificated of deposits = $11,000 - x

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according to question

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the amount invested in municipal bond is $8,000

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