Company A has EBITDA of $110 million and debt of $30 million, assuming it has no cash.

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Company A has EBITDA of $110 million and debt of $30 million, assuming it has no cash. The total enterprise value of the company is at 3x EBITDA. A growth equity fund invests $200 million of new capital in Company A.

What fraction of equity is controlled by the PE firm after this investment?

Related Book For answer-question

Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Mar 29, 2023 05:05 AM

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Company A has EBITDA of $110 million and debt of $30 million, assuming it has no cash.

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First we need to calculate the enterprise value EV of Company A EV 3 x EBI... View the full answer

Introduction To Corporate Finance

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