Calculation Explanation

Step 1: Calculate Enterprise Value (EV) Enterprise Value = Market value of debt + Market value of common equity - Cash and investments EV = 310 + 290 - 40 = 560

Step 2: Calculate EV/EBITDA ratio EV/EBITDA = 560 / 50 = 11.2

Step 3: Verify the answer The calculation confirms that the EV/EBITDA ratio is 11.2, which corresponds to option A.

Key Formula:

• Enterprise Value (EV) = Market Value of Debt + Market Value of Equity - Cash & Equivalents
• EV/EBITDA = Enterprise Value ÷ EBITDA