ABC Corporation is purchasing DEF Corp using an asset swap so that it is tax-free to...
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ABC Corporation is purchasing DEF Corp using an asset swap so that it is tax-free to the owners of DEF Corp. DEF's EBITDA is 145.5 million and the price that ABC pays is 6 times EBITDA. If the owners of DEF Corp. have a tax rate of 20.5%, what is the equivalent price in millions if DEF is sold to a cash buyer? ABC Corporation is purchasing DEF Corp using an asset swap so that it is tax-free to the owners of DEF Corp. DEF's EBITDA is 145.5 million and the price that ABC pays is 6 times EBITDA. If the owners of DEF Corp. have a tax rate of 20.5%, what is the equivalent price in millions if DEF is sold to a cash buyer?
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Answer rating: 100% (QA)
The price that ABC pays to DEF Corp is 6 times its EBITDA or 1455 million 6 873 mi... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
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