What should Outward Plc expect to pay for Inward Ltd

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Question - Inward Ltd, a private company, has three publicly traded competitors, namely Impulse Plc., Exclusive Plc., and Explore Plc. Shares of the three firms are trading at multiples of earnings before interest, taxes, depreciation, and amortization (EBITDA) of 12, 15, and 18, respectively. Outward Plc wishes to acquire Inward Ltd. and estimates that next year the firm will achieve EBITDA of £15 million. To gain a controlling interest in the firm, Outward Plc expects to pay at least a 40% premium. What should Outward Plc. expect to pay for Inward Ltd?

Reference no: EM132992384

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