Use the Tables for the Question(s)below

question 4

Multiple Choice

Use the tables for the question(s) below.
Pro Forma Income Statement for Ideko,2005-2010 Pro Forma Balance Sheet for Ideko,2005-2010
-Assuming that Ideko has a EBITDA multiple of 8.5,then the continuation enterprise value of Ideko in 2010 is closest to:

• A)$152.8 million
• B)$272.8 million
• C)$301.7 million
• D)$181.7 million

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Definitions:

SML

The Security Market Line, a graphical representation of the Capital Asset Pricing Model (CAPM) showing the relationship between the expected return of a security and its risk.

CML

The Capital Market Line, representing the risk-return trade-off of efficient portfolios in the capital market theory; it shows the highest return possible for any given level of risk.

Well-Diversified Portfolios

Investment portfolios that contain a wide variety of assets to minimize exposure to any single asset or risk.

Relative Systematic Risk

The risk inherent to the entire market or market segment, which can be compared relative to other stocks or securities within the same market.