What are the enterprise-value-to-ebita multiples for both


You are valuing multiple steady-state companies in the same industry. Company A id projected to earn $160 million in EBITA next year, grow at 2 percent per year, and generate ROICs equal to 15 percent. Company C is projected to earn $160 million in EBITA next year, grow at 5 percent per year, and generate ROICs equal to 12 percent. Both companies have an operating tax rate of 25 percent and a cost of capital of 10 percent. What are the enterprise-value-to-EBITA multiples for both companies? Does higher growth lead to a higher multiple in this case?

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Financial Management: What are the enterprise-value-to-ebita multiples for both
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