When using EV/EBITDA multiples for valuation, which of the following adjustments is most appropriate for a company with significant one-time restructuring charges in the most recent period?

1. AAdd back restructuring charges to EBITDA before applying the multiple✓ Correct answer
2. BExclude depreciation and amortization from EBITDA
3. CUse reported EBITDA, as restructuring charges are not part of operating activities
4. DSubtract restructuring charges from enterprise value

Reading one answer is not the same as being ready

Lucky the Banker is a free practice app with 995+ Series 79 questions, weak-area tracking, and timed mock exams. No credit card, no paywall.

• If a company's share price and diluted share count remain constant, what is the effect of higher interest expense on…
• A firm has an enterprise value of $2 billion, total debt of $600 million, cash of $100 million, and equity of $1.2…
• A credit agreement requires a minimum EBITDA/interest coverage ratio of 3.5x. In the most recent fiscal year, the…
• A company's current ratio is 1.0, and its quick ratio is 0.5. What does this suggest about its inventory levels…
• An investment banker is valuing a private company using public comparables. If the private company has a lower EBITDA…
• If a company increases its net income but its stock price remains constant, what happens to its P/E ratio?
• According to the DuPont equation, which of the following would increase ROE if net income and sales are unchanged, but…
• A company has EBITDA of $12 million, depreciation and amortization of $2 million, and interest expense of $3 million.…