Create industry EBITDA and EBIT multiples. Then find the expected value of BMP using these multiples, where
Question:
Create industry EBITDA and EBIT multiples. Then find the expected value of BMP using these multiples, where BMP has: net income of $24,488,481, tax rate of 24%, interest on debt of $1,510,000, cost of debt of 7.27%, depreciation and amortization of $16,440,000, 4,622,000 shares outstanding, current stock price of $77.96 and getting a 31% premium. Using allinformation, (i) evaluate BMP versus its industry peers and (ii) assess whether this is a good deal and explain why or why not
RAE
Net Income 15,075,000
Taxes 7,129,478
EBT 22,204,478
Interest 774,888
Depreciation/Amortization 7,662,500
EBITDA 30,641,866
Equity Acquisition Price 288,040,000
Interest Bearing Debt 9,960,000
LOI
20,300,000
8,700,000
29,000,000
3,641,472
7,840,000
40,481,472
312,000,000
50,320,000
CNT
14,088,785
5,478,972
19,567,757
573,991
3,831,250
23,972,998
221,569,231
6,252,626
Expert Answer:
Solution To create industry EBITDA and EBIT multiples we can use the data provided for RAE LOI and CNT RAE EBITDA 30641866 EBIT 22204478 LOI EBITDA 40... View the full answer
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
