GoHabs Firm Has Assets and Liabilities with Book Values of $65

question 73

Multiple Choice

GoHabs Firm has assets and liabilities with book values of $65 million and $35 million, respectively.The market value of the assets is $75 million and the market value of the debt is $40 million.If GoHabs's EBITDA is $20 million, what is the EBITDA multiple?

• A)0.67
• B)1.50
• C)1.75
• D)3.75

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Definitions:

Liabilities

Financial obligations or debts owed by a business to another entity, payable in money, goods, or services.

Notes Payable

Refers to promissory notes a company issues, promising to pay a specific amount of money at a future date.

Salaries

Regular payments made to employees for their services, often expressed as an annual amount but payable in smaller increments such as monthly or biweekly.

Accounts Payable

Obligations owed by a company to suppliers or creditors for goods and services received but not yet paid for.