Calculate the continuation value of KMS using your reproduction of Table 18.8 from Problem 14, and assuming an EBITDA multiple of 8.5.

Data from table 18.8

Data from problem 14

Under the assumption that KMS’s market share will increase by 0.25% per year (and the investment and financing will be adjusted as described in Problem 13), you project the following depreciation:

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1 Year 2 Income Statement ($000s) 3 Sales 4 Costs Except Depreciation 5 EBITDA 6 Depreciation 7 EBIT 8 Interest Expense (net) 9 Pretax Income 10 Income Tax 11 Net Income 2019 2020 2021 2022 2023 2024 74,889 88,369 103,247 119,793 138,167 158,546 -58,413-68,928 -80,533 -93,438 -107,770-123,666 16,476 19,441 22,714 26,354 30,397 34,880 -5,493 -7,444 -7,499 -7,549 -7,594 -7,635 10,983 11,997 15,215 18,805 22,802 27,245 -306 -306 -1,666 -1,666 -1,666 -1,666 10,677 11,691 13,549 17,139 21,136 25,579 -2,669 -2,923 -3,387 -4,285 -5,284 -6,395 8,007 8,769 10,162 12,854 15,852 19,184