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Given EBITDA 2009 Added EBITDA Funding need VC’s required rate

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PROBLEM 10-5 Given EBITDA 2009 Added EBITDA Funding need VC’s required rate Rate on convertible… 1 answer below » PROBLEM 10-5 Given EBITDA 2009 Added EBITDA Funding need VC’s required rate Rate on convertible debt Term EBITDA multiple EBITDA growth rate Solution Legend $4,000,000 1,000,000 5,800,000 25.0% 8.0% 5 years 5 20.0% = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Solution a. What is the value of the combined firm in five years? Estimated EBITDA EBITDA 2009 Estimated EBITDA 2014 Multiple 5 Enterprise Value Less: Debt $(5,800,000) Equity Value in 2014 b. What View complete question » PROBLEM 10-5 Given EBITDA 2009 Added EBITDA Funding need VC’s required rate Rate on convertible debt Term EBITDA multiple EBITDA growth rate Solution Legend $4,000,000 1,000,000 5,800,000 25.0% 8.0% 5 years 5 20.0% = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Solution a. What is the value of the combined firm in five years? Estimated EBITDA EBITDA 2009 Estimated EBITDA 2014 Multiple 5 Enterprise Value Less: Debt $(5,800,000) Equity Value in 2014 b. What share of the firm’s equity will the VC require? VC’s Cash Flows Year Cash Flows 0 (5,800,000) 1 2 3 4 5 Year 5 Conversion Value VC Rate of Return VC’s Share c. What share of the firm’s equity will the VC require? Estimated EBITDA EBITDA 2009 Estimated EBITDA 2010 Multiple 5 Enterprise Value Less: Debt $(5,800,000) Equity Value in 2014 VC’s share Solved for using Goal Seek such that the VC realizes the desired 25% return. Document Preview: CB_DATA_
Problem 10-5
Estimated EBITDA 2014
Equity Value in 2014
Equity Value in 2014
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
= Qualitative analysis or Short answer required
PROBLEM 10-5
EBITDA 2009
EBITDA 2009
Multiple
years
VC’s required rate
Term
EBITDA growth rate
EBITDA multiple
Added EBITDA
Rate on convertible debt
Year
VC’s Cash Flows
Cash Flows
VC Rate of Return
Given
Solution
VC’s Share
c. What share of the firm’s equity will the VC require?
VC’s share
a. What is the value of the combined firm in five years?
Estimated EBITDA 2010
Enterprise Value
Less: Debt
b. What share of the firm’s equity will the VC require?
Year 5 Conversion Value
Estimated EBITDA
Funding need
$4,000,000.00
1000000.00
5800000.00
0.25
0.08
5.00
5.00
0.20
5.00
($5,800,000.00)
0.00
-5800000.00
1.00
2.00
3.00
4.00
5.00
5.00
($5,800,000.00)
Solved for using Goal Seek such that the VC realizes the desired 25% return.
CB_DATA_
Problem 10-5
Estimated EBITDA 2014
Equity Value in 2014
Equity Value in 2014
Solution Legend
= Value given in problem
= Formula/Calculation/Analysis required
= Goal Seek or Solver cell
= Crystal Ball Input
= Crystal Ball Output
= Qualitative analysis or Short answer required
PROBLEM 10-5
EBITDA 2009
EBITDA 2009
Multiple
years
VC’s required rate
Term
EBITDA growth rate
EBITDA multiple
Added EBITDA
Rate on convertible debt
Year
VC’s Cash Flows
Cash Flows
VC Rate of Return
Given
Solution
VC’s Share
c. What share of the firm’s equity will the VC require?
VC’s share
a. What is the value of the combined firm in five years?
Estimated EBITDA 2010
Enterprise Value
Less: Debt
b. What share of the firm’s equity will the VC require?
Year 5 Conversion Value
Estimated EBITDA
Funding… Attachments: Q.-Attachment….xls View less » Sep 17 2015 02:04 PM


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