Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

Harman Electrical Engineering (HEE) has developed a ground-breaking new robotics technology already in use to build major civil engineering construction projects around the country. The firm is privately held and there is no public market for its common stock. HEE's 2012 EBIT was $3.9 million. The firm's year-end 2012 accumulated depreciation balance was $1.1 million; at the end of 2011, that balance was $800,000. At the end of 2012, HEE had total liabilities of $4.4 million, which included a $2.6 million loan balance, and the firm's total shareholders' equity balance was $1.6 million. The CEO has asked you to determine the value of HO's equity. Your research reveals that BridgeTech is a public company that develops robotics software for large-scale manufacturing operations. BridgeTech's share price is $120 and the firm has 500,000 shares outstanding. BridgeTech also has $15 million in bonds outstanding, and its EBITDA is $18.75 million. Make sure to provide all calculations in your answers to each of the following problems:

Required:

(a) find out BridgeTech's enterprise value and EBITDA multiple.

(b) find out Harman Electrical Engineering's EBITDA.

(c) After completing (a) and (b) above, use BridgeTech's EBITDA multiple to determine HEE's implied Enterprise Value and its estimated equity value

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M946196

Have any Question? 


Related Questions in Basic Finance

Candy kane has taken out a 250000 mortgage at a quoted rate

Candy Kane has taken out a $250,000 mortgage at a quoted rate of 6.3% compoundedsemi-annually. If the mortgage requires monthly payments over a term of 20 years, with each payment made at the end of the period, what is t ...

Assume the following year zero capital investment 6m and

Assume the following: Year Zero: Capital Investment = $6M and Increase in NWC = $.5M; Years 1-4: OCF = $4M; Year 4: Recovery of Earlier Increase in NWC and Cash Flow from Salvage = $2.5M. What are the incremental cash fl ...

1 define willingness to pay and how it can be evaluated2

1. Define willingness to pay and how it can be evaluated. 2. What information is normally obtained from a credit report? 3. In analyzing corporate credit, what further investigation would an underwriter employ beyond a c ...

Suppose you own an american call option on pfizer stock

Suppose you own an American call option on Pfizer stock. Pfizer stock has gone up in value considerably since you bought the option, so your investment has been profitable. There is still one month to go before the optio ...

Answer the following questions as they relate to implied

Answer the following questions as they relate to implied volatilities. a. Can implied volatilities be expected to vary for options on the same stock with the same exercise prices but different expirations? b. Can implied ...

1 why is notional principal often exchanged in a currency

1. Why is notional principal often exchanged in a currency swap but not in an interest rate or equity swap? Why would the parties to a currency swap choose not to exchange the notional principal? 2 .Explain how the follo ...

Ethical dilemma- cindy and jack have always practiced good

Ethical Dilemma - Cindy and Jack have always practiced good financial habits, in particular, developing and living by a budget. They are currently in the market to purchase a new car and have budgeted $300 per month for ...

Suppose you are comparing two companies that are in the

Suppose you are comparing two companies that are in the same line of business. Company C has an operating cycle of 40 days, and Company D has an operating cycle of 60 days. Company C has a current ratio of 3, and Company ...

1 why may researchers not offer potential participants

1. Why may researchers not offer potential participants large incentives (for example, a large amount of money) to participate in research? 2. In general, how much mental or physical risk is permissible in research? 3. D ...

What three criteria must be met to establish that one

What three criteria must be met to establish that one variable causes changes in behavior? Which of these criteria are met by quasi-experimental designs? Which of these criteria are not met, and why?

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro