Based Upon the Average EV/EBITDA Ratio of the Comparable Firms

question 91

Multiple Choice

Based upon the average EV/EBITDA ratio of the comparable firms, if Loop holds $6.5 million of cash in excess of its working capital needs, then Loop's target market value of equity is closest to:

• A)$155 million
• B)$193 million
• C)$157 million
• D)$191 million
• E)$165 million

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given year, and must be paid out before any dividends on common stock.

Capital Stock

The amount of shares that a company's shareholders have purchased and own, representing ownership in the company.

Dividend

A share of the profits paid to shareholders of a corporation, usually distributed in cash or additional stocks.

Commission Charges

Fees charged by brokers or agents for their services in facilitating transactions.