Use the Tables for the Question(s) Below

question 43

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 unlevered P/E ratio of Ideko in 2010 is closest to:

• A) 25.9
• B) 16.4
• C) 14.5
• D) 19.0

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Definitions:

Investment in Associates

A financial interest held in another company that gives the investor significant influence, typically reflected by ownership of 20% to 50% of the voting stock.

Unrealized Gain

An increase in the value of an asset that has not been sold, hence the gain is not reflected in the financial statements as actual profit.

Equity Method

An accounting technique used by a company to record its investment in another company based on the profit or loss and changes in the investee's equity.

Dividend Income

Earnings received from owning shares in a company, typically distributed from the company's profits.