What is the equity value for a company with LTM EBITDA of $250 million purchased at a 10x multiple?

To determine the equity value of a company based on its last twelve months (LTM) EBITDA and an applied multiple, you start by calculating the implied enterprise value (EV). In this case, the LTM EBITDA is $250 million, and the multiple is 10x.

By multiplying the EBITDA by the multiple, you find the enterprise value:

Enterprise Value (EV) = LTM EBITDA × Multiple

EV = $250 million × 10

EV = $2.5 billion

This figure represents the total value of the company, encompassing both equity and debt. To find the equity value, you must consider net debt, which is the difference between the company's total debt and its cash and cash equivalents. However, since the question does not provide specific information regarding any debt or cash levels, it can be reasonably assumed that the implied equity value aligns with the enterprise value.

Given this context, if the question infers no net debt or suggests that the entire enterprise value translates directly to equity value, then the equity value in this case would indeed be $2.5 billion.

The correct answer aligns with the correct calculation process and interpretation of the given data, making it the most logical choice based on the information provided.