Question 24 An investor is valuing Company XT which has the following expected key financial measures...

  
 
 

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Question 24 An investor is valuing Company XT which has the following expected key financial measures for year-end 2022 (Table 2):< Equity value Level of cash Level of interest-bearing debt Minority interest Financial Investments Number of equity shares 2022 Expected EBITDA e Table 24 €27,000 €7,800¹ €4,600¹ €1,200 €1,780¹ 3,000 €5,600¹ Additionally, the investor has the following information about a set of comparable listed companies that are similar both in terms of leverage and in terms of other fundamentals (Table 3):< "Continues on next page..." 고 لے ( Company B C De Table 3 Enterprise value €32,000<¹ C. €26,000+ €57,000 For your answers, round computations to one decimal place (e.g., present 1.56 as 1.6).< EBITDA 2022< €4,5004¹ €3,780 €8,600¹ a. What is the 2022 enterprise value/EBITDA (EV/EBITDA) multiple of company XT implied in the investor's expectations? Explain your answer.< [10 marks] b. Consider only the information on the 2022 EV/EBITDA multiples of the set of comparable companies. What is the conclusion about the relative valuation of company XT? Explain your answer.< [10 marks] When using a certain multiple in the context of a valuation exercise, it is very important to consider the set of fundamental variables that command that multiple. Do you agree? Explain your answer.< [5 marks] U Question 24 An investor is valuing Company XT which has the following expected key financial measures for year-end 2022 (Table 2):< Equity value Level of cash Level of interest-bearing debt Minority interest Financial Investments Number of equity shares 2022 Expected EBITDA e Table 24 €27,000 €7,800¹ €4,600¹ €1,200 €1,780¹ 3,000 €5,600¹ Additionally, the investor has the following information about a set of comparable listed companies that are similar both in terms of leverage and in terms of other fundamentals (Table 3):< "Continues on next page..." 고 لے ( Company B C De Table 3 Enterprise value €32,000<¹ C. €26,000+ €57,000 For your answers, round computations to one decimal place (e.g., present 1.56 as 1.6).< EBITDA 2022< €4,5004¹ €3,780 €8,600¹ a. What is the 2022 enterprise value/EBITDA (EV/EBITDA) multiple of company XT implied in the investor's expectations? Explain your answer.< [10 marks] b. Consider only the information on the 2022 EV/EBITDA multiples of the set of comparable companies. What is the conclusion about the relative valuation of company XT? Explain your answer.< [10 marks] When using a certain multiple in the context of a valuation exercise, it is very important to consider the set of fundamental variables that command that multiple. Do you agree? Explain your answer.< [5 marks] U

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Question Ans 1 We know Enterprise Value Market Value of Equity Market Value of Debt Preference share ... View the full answer