Question: 2.4. (a) Applying the comparable EBITDA multiple to Fleets 2004 EBITDA yields: 56.7 6 = $340 million. (b) Cost of debt = 7%, cost

2.4.

(a) Applying the comparable EBITDA multiple to Fleet’s 2004 EBITDA yields: 56.7 × 6 =

$340 million.

(b) Cost of debt = 7%, cost of equity = 4.5% + (1.32)(4.4%) + 3.9% = 14.4%, WACC

= 9.27%.

PV of FCF $66.22 million 2012 continuation value at 3% growth rate $425.79 PV of continuation value 273.28 Enterprise value on 1/1/2008 $339.50

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