Answer: 32.2

## Explanation To calculate the conglomerate discount, we need to: 1. **Calculate the sum-of-the-parts (SOTP) value** - Segment Y: EV = EBITDA × Peer multiple = 9.0 × 10.8 = $97.2 million - Segment Z: EV = Sales × Peer multiple = 48.0 × 2.5 = $120.0 million - Total SOTP EV = 97.2 + 120.0 = $217.2 million 2. **Calculate the actual enterprise value** - Market value of equity = $130 million - Net debt = $10 million - Actual EV = Market value of equity + Net debt = 130 + 10 = $140 million 3. **Calculate conglomerate discount** - Conglomerate discount = SOTP EV - Actual EV = 217.2 - 140 = $77.2 million However, the question asks for the conglomerate discount in $ millions, and $77.2 million corresponds to option B. But let me verify the calculation: **Wait, I need to recheck the calculation:** Actually, the conglomerate discount is the difference between the sum-of-the-parts value and the actual market value: - SOTP value = $217.2 million - Actual market value = $130 million (equity) + $10 million (net debt) = $140 million - Conglomerate discount = $217.2 - $140 = $77.2 million This matches option B ($77.2), not option A ($32.2). Let me double-check the peer multiples: Segment Y: 9.0 × 10.8 = $97.2 million ✓ Segment Z: 48.0 × 2.5 = $120.0 million ✓ Total SOTP = $217.2 million ✓ Actual EV = $140 million ✓ Discount = $77.2 million ✓ Therefore, the correct answer should be **B. 77.2**.

Author: LeetQuiz Editorial Team