Edelman Engines has $17 billion in total assets —of
which cash and equivalents total $100 million. Its balance sheet shows $1.7 billion in current
liabilities—of which the notes payable balance totals $1 billion. The firm also has $10.2 billion
in long-term debt and $5.1 billion in common equity. It has 300 million shares of common
stock outstanding, and its stock price is $20 per share. The firm’s EBITDA totals $1.368 billion.
Assume the firm’s debt is priced at par, so the market value of its debt equals its book value.
What are Edelman’s market/book and its EV/EBITDA ratios?

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Market/book ratio = 1.18 

EV/EBITDA ratio = 1.25

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