A firm has 4,250 shares of stock outstanding with a market value of $16.65 a share,$64,800 of long-term debt with an interest rate of 7.5 percent,$21,900 of short-term debt,cash on hand of $5,200,sales of $213,000,costs of $126,200,and depreciation of $13,400.The tax rate is 35 percent.What is the enterprise value multiple?
A)1.50 times
B)1.67 times
C)2.33 times
D)2.18 times
E)1.92 times

Question

Quizplus · Accepted Answer

Enterprise value multiple = [(4,250 × $16.65)+ $64,800 - $5,200] / ($213,000 - $126,200)= 1.50 times

A Firm Has 4,250 Shares of Stock Outstanding with a Market