Answer-first summary for fast verification
Answer: $209,440,000.
## Calculation Explanation **Step 1: Calculate Enterprise Value (EV) before discounts** - EBITDA = $35,000,000 - EV/EBITDA multiple = 8.0 - EV = EBITDA × Multiple = $35,000,000 × 8.0 = $280,000,000 **Step 2: Apply discounts** - Discount for lack of control (DLOC) = 12% - Discount for lack of marketability (DLOM) = 15% **Step 3: Calculate total discount factor** Total discount factor = 1 - [(1 - DLOC) × (1 - DLOM)] Total discount factor = 1 - [(1 - 0.12) × (1 - 0.15)] Total discount factor = 1 - [0.88 × 0.85] Total discount factor = 1 - 0.748 = 0.252 or 25.2% **Step 4: Calculate final value** Final value = EV × (1 - Total discount) Final value = $280,000,000 × (1 - 0.252) Final value = $280,000,000 × 0.748 = $209,440,000 Therefore, the correct answer is **A: $209,440,000**.
Author: LeetQuiz Editorial Team
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An analyst is assessing the value of a private company from the perspective of a non-controlling, minority-interest shareholder. The analyst gathers the following information:
$35,000,000Based on the guideline public company method, the value of the company is:
A
$209,440,000.
B
$246,400,000.
C
$280,000,000.
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