API, Inc, Is Considering an Investment in ETO, Inc

question 17

Multiple Choice

API, Inc., is considering an investment in ETO, Inc. The EBITDA for ETO is currently $6.5 million, and similar deals have recently closed at a 4.5 multiple. The corporate tax rate is 21%. What is the estimated valuation for ETO, Inc.?

• A)$292,500
• B)$1,444,444
• C)$2,925,000
• D)$23,107,500
• E)$29,250,000

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Definitions:

Gold Rush

A period marked by the rapid influx of miners and settlers to areas where gold has been discovered, notably in California in the mid-19th century.

Cultural Consequences

Refer to the impact and changes within societies and communities due to the intermingling and exchange of cultures through migration, colonization, globalization, or cultural assimilation.

Ecological Consequences

The effects of human activities on the environment, including loss of biodiversity, climate change, pollution, and alteration of natural habitats.

Texas Independence

The process by which the Republic of Texas declared and achieved independence from Mexico in 1836, leading to its eventual annexation by the United States in 1845.