Assume That a Venture Is Expected to Have an EBITDA

question 38

Multiple Choice

Assume that a venture is expected to have an EBITDA of $1,500,000 at the end of five years from now. If the venture's value is expected to be $12,000,000, what "valuation multiple" was being assumed?

• A) 1 time
• B) 4 times
• C) 8 times
• D) 10 times
• E) 12 times

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Definitions:

Incremental Models

Models or theories that suggest development or progress occurs in small, sequential steps.

Continuous Process

A process characterized by ongoing operations or functions without interruption.

Psychoanalytic Theory

A theory of personality development and its complex functioning in adulthood originated by Sigmund Freud.

Superego

In Freud’s personality theory, the last of three aspects of personality, which serves as an “internalized parent” that causes one to feel guilty if his behavior deviates from parental and societal restrictions.