Chartered Financial Analyst Level 2
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An analyst collects the following data for a privately held company with no debt outstanding and two lines of business:
| Engineering | Homebuilding |
|-------------|--------------|
| EBITDA per business line | $1,500,000 | $1,000,000 |
| EV/EBITDA multiples for comparable public companies | 13.1× | 4.1× |
Using a market approach to estimate the EV of the company, the analyst determines the discount for lack of control to be 10% and the discount for lack of marketability to be 12.5%. The EV for the company from a non-controlling, minority interest shareholder perspective is closest to:
An analyst collects the following data for a privately held company with no debt outstanding and two lines of business:
| Engineering | Homebuilding |
|-------------|--------------|
| EBITDA per business line | $1,500,000 | $1,000,000 |
| EV/EBITDA multiples for comparable public companies | 13.1× | 4.1× |
Using a market approach to estimate the EV of the company, the analyst determines the discount for lack of control to be 10% and the discount for lack of marketability to be 12.5%. The EV for the company from a non-controlling, minority interest shareholder perspective is closest to:
Exam-Like
A
$16,931,250.
B
$18,406,250.
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