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Author Question: The American Express Card is an example of a bank credit card. Indicate whether the statement is ... (Read 56 times)

swpotter12

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on: Jul 11, 2018
The American Express Card is an example of a bank credit card.
 
  Indicate whether the statement is true or false

Question 2

Creative Centers Inc. has an EBIT of 200,000, 30,000 in depreciation, 450,000 in outstanding debt, a forward-looking EV/EBITDA multiple of 7.50, and an estimated cost of capital of 10. Use the EV/EBITDA approach to value the firm.
 
  A) 837,500
  B) 950,000
  C) 1,100,000
  D) 1,275,000


underwood14

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Reply #1 on: Jul 11, 2018
Answer to Question 1

FALSE

Answer to Question 2

D
Explanation: D) EV = Multiple  EBITDA, then, Ve = EV - Vd
=7.5  230,000 = 1,725,000 - 450,000 = 1,275,000.


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swpotter12

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Reply #2 on: Jul 11, 2018
Thank you :)


underwood14

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Reply #3 on: Jul 11, 2018
Happy to help you


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