CSH has EBITDA of
$ 5 million. You feel that an appropriate EV/EBITDA ratio for CSH is 99.
CSH has $ 10 million in debt, $ 2
million in cash, and
800,000 shares outstanding. What is your estimate of CSH's stock price?
The Enterprise Value can be calculated as :
EV/ EBITDA = 99
EV = $5* 99
= $495
So, EV =Market cpaitalisation + outstanding debt - cash
$495 = Market capitalization + $10 - $2
Market capitalization = $487
Market capitalization = share price * number of shares outstanding
= $487,000,000/ 8,00,000
So, the share price is = $608.75
CSH has EBITDA of $ 5 million. You feel that an appropriate EV/EBITDA ratio for CSH...
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