What is Lenovo’s implied enterprise value if it has an EBITDA of 40 and other computer companies have EV/EBITDA ratios of 20?

To find Lenovo’s implied enterprise value (EV), we first need to use the EV/EBITDA ratio of the other computer companies. The EV/EBITDA ratio is calculated by dividing the enterprise value by EBITDA. If other companies have an EV/EBITDA ratio of 20, this means:

EV/EBITDA = 20

Using this ratio, we can rearrange the equation to find EV:

EV = EV/EBITDA × EBITDA

Now, substituting in the numbers:

EV = 20 × 40

EV = 800

Thus, Lenovo’s implied enterprise value is 800. The correct answer is (b) 800.