Question: You are satisfied that the enterprise value / EBITDA multiple for PrivateCo, Inc. that you calculated in the previous step is appropriate. PrivateCo, Inc. expects
You are satisfied that the enterprise value / EBITDA multiple for PrivateCo, Inc. that you calculated in the previous step is appropriate. PrivateCo, Inc. expects next year EBITDA to be $100,000, and currently has debt of $200,000 and cash of $80,000: You are tasked with valuing a 60% equity interest in PrivateCo, Inc. on a controlling, marketable basis. Using the enterprise value/ EBITDA multiple calculated in the previous step and information about PrivateCo, Inc. provided above, determine the value of the 60% equity interest in the company? For purposes of your calculations, assume the subject interest warrants a control premium of 15%. Show your calculations (5 points): ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ ___________________________________________________________ You have also been asked to determine the fair market value of a 20% equity interest in PrivateCo, Inc. on a minority, nonmarketable basis. Using the enterprise value/ EBITDA multiple calculated in the previous step and information about Private Co, Inc. provided above, determine the value of the 20% equity interest in the company. For purposes of your calculations, assume the subject interest warrants a discount for lack of control of 10% and a discount for lack of marketability of 20%. Show your calculations (5 points): ______________________________________
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