Turnbull company had an EBIT of $247 million in the last financial year. Its depreciation and amortisation expenses amounted to $84 million. The company has 135 million shares outstanding and a share price of $12.80. A competing company that is very similar to Turnbull has an enterprise value/EBITDA multiple of 5.40. Multiples analysis: What is the enterprise value of Turnbull company? Round to the nearest million dollars.

Question

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The enterprise value (EV) is calculated using the EV/EBITDA multiple. First, calculate Turnbull's EBITDA: EBIT ($247 million) + Depreciation and Amortization ($84 million) = $331 million. Then, multiply the EBITDA by the EV/EBITDA multiple: $331 million * 5.40 = $1,787 million.

Turnbull Company Had an EBIT of $247 Million in the Last