Company A has EBITDA of $4,500 and is purchased for 6x multiple in 2016, financed with $20,000

Fantastic news! We've Found the answer you've been seeking!

Question:

Company A has EBITDA of $4,500 and is purchased for 6x multiple in 2016, financed with $20,000 of debt. In 2019 the company has $5,600 of EBITDA and is sold for the same 6x multiple. Assuming there is $15,000 of debt at the time of the sale.

What is the equity return?

Related Book For answer-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1285453828

2nd edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

See More Books

Posted Date: May 02, 2023 06:48 AM

See More Questions

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
Bill and Fiona Russell have always enjoyed craft beer, and in recent years have started making small batches at home. As they experimented, they mastered several niche recipes including a key lime...
Assess the requirements of the Sarbanes-Oxley Act related to accounting quality, indicating whether or not you believe the requirements are sufficient to protect stockholders and potential investors....
Use any method to determine if the series converges or diverges. Give reasons for your answer. n10 10" n=1
Consider the December transactions for Shine King Cleaning that were presented in Chapter 5. (Cost data has been removed from the sale transactions.) Dec 2 Purchased 600 units of inventory, $3,600,...
Do both for-profit and not-for-profit healthcare organizations have access to contribution capital?
The number of working strokes per minute in case of 4-stroke I.C. engine are (a) $\mathrm{N} / 2$ (b) $\mathrm{N}$ (c) $2 \mathrm{~N}$ (d) $4 \mathrm{~N}$ where $\mathrm{N}=\mathrm{rpm}$.
Bolling Electronics manufactures DVD players for commercial use. W. Blaker Boiling, president of Bolling Electronics, is contemplating producing DVD players for home use. The activities necessary to...
A steel suction anchor, 36" OD x 33" ID is being deployed as part of a mooring spread for a floating production platform located in 825 ft of water. The top of the anchor consists of a 1.1/2" thick...
Effective financial statement analysis requires an understanding of a firms economic characteristics. The relations between various financial statement items provide evidence of many of these...
Why is it not possible to increase the counting efficiency of a fission chamber indefinitely simply by increasing the thickness of the fissionable deposit?
Muriel deposits $8600 today and is promised a return of $14620 in 8 years. What is the implied annual rate of return?
What are the key components of the extracellular matrix in eukaryotic tissues, and how do they facilitate intercellular communication and tissue integrity ?
At June 1 , 2 0 2 0 , Bramble company had an accounts receivable balance of $ 1 1 , 2 0 0 . During the month, the company performed credit services of $ 2 8 , 0 0 0 and collected accounts receivable...
Required information [ The following information applies to the questions displayed below. ] The following data is provided for Garcon Company and Pepper Company for the year ended December 3 1 . \...
Find solution of the following differential equation y" - x(y') = 0
Spot rate (USD/BRL) 5.3900 180-day forward rate (USD/BRL) 5.8510, 180-day U.S. interest rate (p.a.) 1.00%, 180-day Brazilian interest rate (p.a.) 7.00%. Suppose you can mobilize USD 10 million or the...
How has the too-big-to-fail policy been limited in the FDICIA legislation? How might limiting the too-big-to-fail policy help reduce the risk of a future banking crisis?
How are U.S. GAAP and IFRS changing over time?
Using the information from RE12-9, assume that Americas Sweethearts is a reporting unit of Grand Champion. At the end of 2017, Americas Sweethearts has a lair value of $720,000 and a book value of...
On January 1, 2016, Somerville Corporation sold a used truck to Cornelius Company and LO 13.8 accepted a $28,000 non-interest-beating note due January 1, 2019. Somerville carried the truck on its...
Let's now study the power method for estimating the ground-state energy, applied to the quantum harmonic oscillator. For this problem, we will work with the Hamiltonian...
While we introduced the variational method and the power method both as a way to approximate the ground state of some system, they both can be used to approximate excited states as well, with...
The anharmonic oscillator is the quantum system that is a modification to the harmonic oscillator, including a term quartic in position: \[\begin{equation*}\hat{H}=\frac{\hat{p}^{2}}{2 m}+\frac{m...

Company A has EBITDA of $4,500 and is purchased for 6x multiple in 2016, financed with $20,000

Question:

Expert Answer:

To calculate the equity return we need to determine the amount of equity invested in the company a... View the full answer

Intermediate Accounting Reporting and Analysis

Students also viewed these finance questions