Enterprise & Equity Value
Parent: market cap $900m, debt $300m, cash $100m, consolidated EBITDA $200m. It owns 75% of a consolidated sub with $80m of that EBITDA; sub peers trade at 10x EV/EBITDA; sub has no debt or cash; book NCI is $50m. Compare EV/EBITDA using book vs market NCI.
Model answer
Market value of the NCI: sub's implied EV = 80 x 10 = $800m; with no net debt that's also its equity value, so the 25% outside stake is worth $200m. Book-based EV = 900 + 300 - 100 + 50 = $1,150m ->…
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