As before, Company A has EBITDA of $110 million and debt of $30 million, assuming...
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As before, Company A has EBITDA of $110 million and debt of $30 million, assuming it has no cash. The total enterprise value of the company is at 3x EBITDA. A growth equity fund invests $200 million of new capital in Company A. Seven years later, the PE firm exits this investment when the enterprise value reaches $960 million; outstanding debt at exit is $60 million.
Which one of the following changes to the company can explain this increase in the value of the company?
Increase of the multiple from 3x to 9x
Increase in net debt from $30 million to $60 million
Decrease of the EBITDA from $110 million to $50 million
Increase of the EBITDA from $110 million to $320 million
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