Average Industry Comparable EBIT multiple is 8.0xb. Average transaction EBIT multiple for the past two years is 7.0xc. Assuming debt to be $10 billion & excess cash balance to be $2 billiond. Furthermore, calculate the IRR based on the calculated Equity Value for 2020 in addition tothe following assumptions:i. Calculate the number of Shares outstanding as of Dec 31, 2020, which will providethe price per share based on the computed Equity Value• Please use Exhibit 1 for the necessary dataii. Assume you have acquired 1,000 shares of the Company and sold the same on Dec31, 2021iii. Assume the exit Equity Value at an Industry Comparable EBIT Multiple of 6.9x as ofDec 31, 2021iv. Assume the same number of shares outstanding from the previous yearv. Assumed debt to be $23 billion & excess cash balance to be $3 billion

To calculate the IRR based on the calculated Equity Value for 2020, we need to follow the given assumptions and steps:

i. First, let's calculate the Equity Value for 2020. We can use the formula:

Equity Value = (EBIT multiple * EBIT) - Debt + Excess Cash

Given that the Average Industry Comparable EBIT multiple is 8.0x and the Average transaction EBIT multiple for the past two years is 7.0x, we can use the average of these two values, which is 7.5x.

Using the data provided in Exhibit 1, we can find the EBIT for 2020. Let's assume it is X.

Equity Value = (7.5x * X) - $10 billion +$2 billion

ii. To calculate the number of Shares outstanding as of Dec 31, 2020, we need to divide the Equity Value by the price per share. Let's assume the number of shares outstanding is Y.

Price per share = Equity Value / Y

iii. Assuming you acquired 1,000 shares of the Company and sold them on Dec 31, 2021, we need to calculate the exit Equity Value. We can use the formula:

Exit Equity Value = (EBIT multiple * EBIT) - Debt + Excess Cash

Given that the Industry Comparable EBIT Multiple is 6.9x, we can use this value.

Using the data provided in Exhibit 1, we can find the EBIT for 2021. Let's assume it is Z.

Exit Equity Value = (6.9x * Z) - $23 billion +$3 billion

iv. Assuming the same number of shares outstanding from the previous year, the number of shares outstanding on Dec 31, 2021, is still Y.

v. Assuming debt to be $23 billion and excess cash balance to be$3 billion, we can use these values in the calculation of the exit Equity Value.

Now, with the calculated Equity Value for 2020 and the exit Equity Value for 2021, we can calculate the IRR. The IRR is the discount rate that makes the present value of the Equity Value for 2020 equal to the exit Equity Value for 2021.

To calculate the IRR, we need to use a financial calculator or software that can solve for the discount rate.