Silver Polygon, Inc., has determined that if its revenues were to increase by 10 percent, then EBIT would increase by 25 percent to $100,000. Th e fi xed costs (cash only) for the fi rm are $100,000. Given the same 10 percent increase in revenues, what would be the corresponding change in EBITDA?

Silver Polygon, Inc., has determined that if its revenues were to increase by 10 percent, then EBIT would increase by 25 percent to $100,000. Th e fi xed costs (cash only) for the fi rm are $100,000. Given the same 10 percent increase in revenues, what would be the corresponding change in EBITDA?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 1P: Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1...

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