n NISM Certifications
XV NISM Series XV
Medium

The market price of a company's share is Rs. 50. This company has a debt of Rs. 500 million and cash of Rs. 100 million. There are 70 million shares outstanding. Calculate the EV/EBITDA ratio of the company if EBITDA was Rs. 500 million.

Practice question from NISM XV Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. 7.8x

    Correct answer

  2. B

    8.2x

  3. C

    9.1x

  4. D

    8.9x

Why this is the answer

EV = (70m × 50) + 500 – 100 = 3,900 million. EV/EBITDA = 3,900 ÷ 500 = 7.8x.

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