What is the tax rate for a company with a P/E multiple of 10x, EBITDA of $40, and net income of $15?

To determine the tax rate for the company in question, we start by examining the provided information. The price-to-earnings (P/E) multiple indicates how much investors are willing to pay for each dollar of earnings.

Given a P/E multiple of 10x and a net income of $15, we can ascertain the earnings before taxes (EBT). Since the P/E ratio is defined as the share price divided by earnings per share, a P/E multiple of 10 implies that the earnings are one-tenth of the value attributed to the company's earnings, as represented by that P/E ratio.

We first calculate the company's earnings before tax, which is the net income divided by (1 - tax rate). We do this through an equation involving expected net income and EBT.

Let’s denote the tax rate as T:

Net Income = EBT * (1 - T)

Replacing the values we have, we can set up the relationship:

15 = EBT * (1 - T)

Next, we need to express EBT in terms of EBITDA provided. Since the company has an EBITDA of $40, we need to estimate the EBT considering operational and tax expenses. Without specific depreciation or interest expenses given in the question