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CSH has EBITDA of $ 6 million. You feel that an appropriate​ EV/EBITDA ratio for CSH...

CSH has EBITDA of $ 6 million. You feel that an appropriate​ EV/EBITDA ratio for CSH is 10. CSH has $ 6 million in​ debt, $ 2 million in​ cash, and 775,000 shares outstanding. What is your estimate of​ CSH's stock​ price?

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Answer #1
Using the EV/EBITDA we can calculate the enterprise value and from that price of share can be calculated
Enterprise value EV/EBITDA ratio*EBITDA
Enterprise value 10*$6 million
Enterprise value $60 million
Stock price Enterprise value + Cash - Debt/No of shares outstanding
Stock price (60,000,000+2,000,000-6,000,000)/775,000
Stock price $72.26
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