Assuming That Ideko Has a EBITDA Multiple of 8

question 3

Multiple Choice

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)17.6
• B)16.4
• C)14.5
• D)19.0

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Definitions:

Minimal Losses

The smallest amount of losses that can be incurred, typically used in the context of minimizing financial or operational losses.

Marginal Revenue

The increase in earnings resulting from the sale of one extra good or service.

Economic Profit

the difference between total revenue and total opportunity costs; a measure of profit beyond the normal return on investment.

Marginal Cost

The addition to total cost from producing one additional unit of a product.