Assuming That Ideko Has a EBITDA Multiple of 9

question 31

Multiple Choice

Assuming that Ideko has a EBITDA multiple of 9.4,then the continuation levered P/E ratio of Ideko in 2010 is closest to:

• A)17.2
• B)14.5
• C)19.0
• D)16.4

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Definitions:

Regular Tax Depreciation

A deduction that allows taxpayers to recover the cost of property used in a business or held for the production of income, computed under the regular tax system.

Real Property

Land and anything permanently attached to it, such as buildings and structures, classified as immovable by law.

Depreciation Adjustment

An accounting method that allocates the cost of tangible assets over their useful life, affecting taxable income.

AMT Purposes

Refers to the objectives of the Alternative Minimum Tax, which is to ensure that individuals and corporations that benefit from certain exclusions, deductions, or credits pay at least a minimum amount of tax.