| Exhibit 14.12 |
Company 1 |
Company 2 |
Company 3 |
| Market Data |
|
|
|
| Share Price |
25 |
16 |
30 |
| Shares Outstanding |
5 |
8 |
15 |
| Short-term debt |
25 |
15 |
30 |
| long-term debt |
50 |
70 |
40 |
| Operating Profit |
|
|
|
| EBITDA |
25 |
30 |
59 |
| EBITA |
22 |
23 |
51 |
Exhibit 14.12 presents market and profit data for three companies. Using this data, compute enterprise-value-to-EBITDA and enterprise-value-to-EBITA for Companies 1 and 2. Is the net difference between Company 1 and Company 2 the same for both ratios? If not, why might this be? If Company 3 has nonoperating assets value at $50 million, what are the company's appropriate enterprise-to-EBITDA and enterprise-value-to-EBITA multiples?