ABC is a private unlisted firm operating in real estate market. It has entered around a...

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ABC is a private unlisted firm operating in real estate market. It has entered around a year back in the industry. XYZ has entered two years back while PQR & MNO have been into the business for very long; but because they are listed their information is readily available as given below. We know that revenues for ABC this year have been 150. How much is its valuation? Give reasons. XYZ PQR MNO 12% 8% 100 200 15 Variables Recent Growth Rate Revenues Operating Profit (EBDIT) Debt Value Equity Value Enterprise Value/EBDIT 15 30 (15+30)/15 =3.0 20 30 10 (30+10)/20 =2.0 4% 1000 70 150 250 (150 +250)/70 =5.71 ABC is a private unlisted firm operating in real estate market. It has entered around a year back in the industry. XYZ has entered two years back while PQR & MNO have been into the business for very long; but because they are listed their information is readily available as given below. We know that revenues for ABC this year have been 150. How much is its valuation? Give reasons. XYZ PQR MNO 12% 8% 100 200 15 Variables Recent Growth Rate Revenues Operating Profit (EBDIT) Debt Value Equity Value Enterprise Value/EBDIT 15 30 (15+30)/15 =3.0 20 30 10 (30+10)/20 =2.0 4% 1000 70 150 250 (150 +250)/70 =5.71

Answer rating: 100% (QA)

SOLUTION To determine the valuation of ABC we can use the enterprise value to EBITDA multiple approa... View the full answer