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:

Gross Profit Method

A technique used to estimate the amount of inventory a business has by applying the gross margin ratio to the cost of goods sold.

Fireproof Vault

A secure storage unit designed to protect contents from fire, typically used to safeguard valuable documents and items.

Grossprofit Ratio

A financial metric that measures the proportion of money left over from revenues after accounting for the cost of goods sold (COGS), expressed as a percentage of sales.

Replacement Cost

The current cost of replacing an asset with a new one of similar style and quality.