Harman electrical engineering hee has developed a

Assignment Help Finance Basics
Reference no: EM13396713

Harman Electrical Engineering (HEE) has developed a ground-breaking new robotics technology already in use to build major civil engineering construction projects around the country.The firm is privately held and there is no public market for its common stock.  HEE’s 2012 EBIT was $3.9 million.The firm’s year-end 2012 accumulated depreciation balance was $1.1 million; at the end of 2011, that balance was $800,000.At the end of 2012, HEE had total liabilities of $4.4 million, which included a $2.6 million loan balance, and the firm’s total shareholders’ equity balance was $1.6 million.The CEO has asked you to determine the value of HO’s equity.Your research reveals that BridgeTech is a public company that develops robotics software for large-scale manufacturing operations.BridgeTech’s share price is $120 and the firm has 500,000 shares outstanding.  BridgeTech also has $15 million in bonds outstanding, and its EBITDA is $18.75 million.Make sure to provide all calculations in your answers to each of the following questions:
Required:

(a) Calculate BridgeTech’s enterprise value and EBITDA multiple.
(b) Calculate Harman Electrical Engineering’s EBITDA.
(c) After completing (a) and (b) above, use BridgeTech’s EBITDA multiple to determine HEE’s implied Enterprise Value and its estimated equity value.

Reference no: EM13396713

Questions Cloud

Need to do a pro-forma statement the solution should be : need to do a pro-forma statement the solution should be around 45000 something. the question is to replace an old mixer
If this was perfectly competitive market how many units : consider a monopolist with the following demand function q 60 - 0.667pa. graph the demand and mr lines. what is
Explain how the science of clasdistics is employed to : q1. describe how the science of clasdistics is used to produce cladograms. q2. what is plate tectonics and how does it
Belk is a chain of stores found primarily in southern : 1 which of the following is not a step that might be used to improve the quality of a firmrsquos marketing
Harman electrical engineering hee has developed a : harman electrical engineering hee has developed a ground-breaking new robotics technology already in use to build major
Explain what are deuterostomes and protostomes and how are : 1. what are deuterostomes and protostomes and how are these concepts useful in biology? forget which opening comes
Discuss the advantages and disadvantages of futures : discuss the advantages and disadvantages of futures contracts. name two established exchanges where you would likely
Deduce the expression for aggregate expenditure curve and : derive an expression for the aggregate expenditure curve and graph it on your exam sheet labeling this initial
Do you think there are differences between the clone and a : in 2008 the food and drug administration fda approved food derived from cloned animals. in addition these products will

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the value of the stock to an investor

New age inc. paid a dividend yesterday of $2.00 per share, new age management expects the dividend to increase next year to $3.00 annually. if the dividend is expected to stay at $3.00 per yera for the foreseeable future.

  Which bank should vegit use for the loan

The loan offered by Bank of Florida has a 12.5 percent simple interest rate with annual interest payments, whereas the loan offered by the Bank of Georgia has a 12 percent simple interest rate with monthly payments. Which bank should Vegit use for..

  Unfortunately in recent times we have seen a number of

unfortunately in recent times we have seen a number of examples of unethical behavior in organizations often tied to

  What is the amount of your scheduled payments

What is the amount of your scheduled payments?

  Calculate the after-tax weighted average cost of capital

Given the following data for U&P Company: Debt (D) = $100 million; Equity (E) = $300 Million; rD = 6%; rE = 12% and TC = 30%. Calculate the after-tax weighted average cost of capital (WACC)

  Will morgan accept the project

Morgan uses net present value method and has a discount rate of 12%. Will Morgan accept the project? What's the NPV?

  Computation of cost of equity using constant growth rate

Computation of cost of equity using constant growth rate and The constant growth rate dividend capitalization model approach

  Determine total profit margin and cash flow

Brandywine Homecare, a non-profit business, had revenues of 12 million dollar in 2007. Expenses other than depreciation totaled 75% of revenues, and depreciation expense was $1.5 million.

  Computation and analysis of property dividend

Computation and analysis of property dividend and The corporation has asked you for advice then what do you recommend.

  How much is the expected total variable cost on the august

Materials and labor are the only variable costs. If production and sales are budgeted to increase to 150 chairs in August, how much is the expected total variable cost on the August budget?

  What is ther cost of the roya retained earnings

Royal Mediterranean cruise Line's common stock is selling for $22 per share. The last dividend was $1.20 and dividends are expected to grow at 6% annual rate. Fotation costs on new stock sales are 5% of the selling price. What is ther cost of the ..

  What will slick make on this deal

Slick decides to buy an out-of-the-money call option on Apple because it is cheaper. He buys 5 contracts of the April 675 at $40. Ignoring commissions and taxes, if Apple reaches $750 by April, what will Slick make on this deal?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd