Homework Answers
Price to Earnings Approach
Average Price to Earnings ratio = (18.8 + 19.5+ 24.1 + 22.4)/ 4 = 21.2
Price of the share = 21.2 * Earnings/ 20 M = (21.2 * 15)/ 20 = $ 15.9
Price to Revenue Approach
Average Price to revenue = (1.2 + 0.9+0.8+ 0.7)/ 4 = 0.9
Price of the share = 0.9* revenue/ 20 M = 0.9* 325/20 = $ 14.625
Add Answer to:
Example: Valuing an IPO Using Comparables Tiger, Inc., is a private company that designs, manufactures, and...
1. 2 3 You are valuing a company that is projected to generate a free cash...
1.
2
3
You are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate in perpetuity thereafter. The company has $20 million of debt and $8 million of cash. Cost of capital is 10.0%. There are 50 million shares outstanding. How much is each share worth according to your valuation analysis? Round to one decimal place. Numeric Answer: You are asked to value Gamecocks Inc. using...
You are in the middle of valuing a stock using the DCF method. According to your projections, the company is expected to...
You are in the middle of valuing a stock using the DCF method. According to your projections, the company is expected to generate free cash flows of $51 million in 4 years, after which FCFF is expected to grow at a stable rate in perpetuity. Instead of using the perpetuity growth method, you decide to estimate the company's terminal value using the exit multiple approach. Your analysis of comparable companies reveal an average EV/FCFF ratio of 13.3. What is your...
If possible answer all. Most imporant are 2 and 3 1. A company is projected to...
If possible answer all. Most imporant are 2 and 3 1. A company is projected to have a free cash flow of $386 million next year, growing at a 5.1% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4%. The company's cost of capital is 11.9%. The company owes $93 million to lenders and has $14 million in cash. If it has 243 million shares outstanding, what is...
The founders and owners of a private company have funded it through the following rounds of...
The founders and owners of a private company have funded it through the following rounds of investment Round Source Price Number of Shares Series A Self $100 200 000 Series B Angel $100 250 000 Series C Venture Capital $125 300.000 The owners decide to take the company public through an IPO, issuing 1 milion new shares Assuming that they successfully complete the IPO the net income for the next year is estimated to be $4 million The price of...
1. 2 You are valuing Soda City Inc. It has $100 million of debt, $90 million...
1.
2
You are valuing Soda City Inc. It has $100 million of debt, $90 million of cash, and 150 million shares outstanding. You estimate its cost of capital is 13.0%. You forecast that it will generate revenues of $700 million and $800 million over the next two years. Projected operating profit margin is 20%, tax rate is 30%, reinvestment rate is 20%, and terminal exit value multiple at the end of year 2 is 15. What is your estimate...
I am sorry that I have uploaded more than one question, because I still have many...
I
am sorry that I have uploaded more than one question, because I
still have many questions, but there are no more questions. I hope
you can help me answer this question. If you can only answer one
question, please do not answer this question, thank you.
1
2
3
You are asked to value Gamecocks Inc. using the relative valuation method. Gamecocks Inc.'s earnings forecast for next year (EPS (next year)) is $2.44. The valuation and earnings of comparable...
if u answer is 150 million, it’s incorrect answer Example 5.12: A company had total revenues...
if u answer is 150 million, it’s incorrect answer
Example 5.12: A company had total revenues of $200 million, operating profit margin of 20%, and depreciation and amortization expense of $10 million over the trailing twelve months. The company currently has $300 million in total debt and $100 million in cash and cash equivalents. If the company's market capitalization (market value of its equity) is $1 billion, what is its EV/EBITDA ratio? Solution: EBITDA = EBIT + Depreciation & Amortization...
I know you have a rule that you can only answer one question, but my time...
I
know you have a rule that you can only answer one question, but my
time is running out and I still have a lot of questions to solve.
Please give me an accommodation. If you just answer one question,
please don't want to answer this question, please don't.
1
2
You are asked to value Gamecocks Inc. using the relative valuation method. Gamecocks Inc.'s earnings forecast for next year (EPS (next year) is $2.44. The valuation and earnings of...
Assume that you are purchasing an investment and have decided to invest in a company in...
Assume that you are purchasing an investment and have decided to
invest in a company in the digital phone business. You have
narrowed the choice to Best Digital Corp. and Zone Network, Inc.
and have assembled the following data.
Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Best Digital Corp. and Zone Network, Inc. and have assembled the following data Your strategy...
Trivoli Inc. is an all-equity firm with 1,000,000 shares outstanding. The company's EBIT is $2,500,000, and...
Trivoli Inc. is an all-equity firm with 1,000,000 shares outstanding. The company's EBIT is $2,500,000, and EBIT is expected to remain constant over time. The company pays out all of its earnings each year, so its earnings per share (EPS) equals its dividends per share (DPS). The company's tax rate is 25%. The company is considering issuing $3.25 million worth of bonds (at par) and using the proceeds for a stock repurchase. If issued, the bonds would have an estimated...
1.
2
3
You are valuing a company that is projected to generate a free cash flow of $10 million next year, growing at a stable 3.0% rate in perpetuity thereafter. The company has $20 million of debt and $8 million of cash. Cost of capital is 10.0%. There are 50 million shares outstanding. How much is each share worth according to your valuation analysis? Round to one decimal place. Numeric Answer: You are asked to value Gamecocks Inc. using...
The founders and owners of a private company have funded it through the following rounds of investment Round Source Price Number of Shares Series A Self $100 200 000 Series B Angel $100 250 000 Series C Venture Capital $125 300.000 The owners decide to take the company public through an IPO, issuing 1 milion new shares Assuming that they successfully complete the IPO the net income for the next year is estimated to be $4 million The price of...
1.
2
You are valuing Soda City Inc. It has $100 million of debt, $90 million of cash, and 150 million shares outstanding. You estimate its cost of capital is 13.0%. You forecast that it will generate revenues of $700 million and $800 million over the next two years. Projected operating profit margin is 20%, tax rate is 30%, reinvestment rate is 20%, and terminal exit value multiple at the end of year 2 is 15. What is your estimate...
I
am sorry that I have uploaded more than one question, because I
still have many questions, but there are no more questions. I hope
you can help me answer this question. If you can only answer one
question, please do not answer this question, thank you.
1
2
3
You are asked to value Gamecocks Inc. using the relative valuation method. Gamecocks Inc.'s earnings forecast for next year (EPS (next year)) is $2.44. The valuation and earnings of comparable...
if u answer is 150 million, it’s incorrect answer
Example 5.12: A company had total revenues of $200 million, operating profit margin of 20%, and depreciation and amortization expense of $10 million over the trailing twelve months. The company currently has $300 million in total debt and $100 million in cash and cash equivalents. If the company's market capitalization (market value of its equity) is $1 billion, what is its EV/EBITDA ratio? Solution: EBITDA = EBIT + Depreciation & Amortization...
I
know you have a rule that you can only answer one question, but my
time is running out and I still have a lot of questions to solve.
Please give me an accommodation. If you just answer one question,
please don't want to answer this question, please don't.
1
2
You are asked to value Gamecocks Inc. using the relative valuation method. Gamecocks Inc.'s earnings forecast for next year (EPS (next year) is $2.44. The valuation and earnings of...
Assume that you are purchasing an investment and have decided to
invest in a company in the digital phone business. You have
narrowed the choice to Best Digital Corp. and Zone Network, Inc.
and have assembled the following data.
Assume that you are purchasing an investment and have decided to invest in a company in the digital phone business. You have narrowed the choice to Best Digital Corp. and Zone Network, Inc. and have assembled the following data Your strategy...
Trivoli Inc. is an all-equity firm with 1,000,000 shares outstanding. The company's EBIT is $2,500,000, and EBIT is expected to remain constant over time. The company pays out all of its earnings each year, so its earnings per share (EPS) equals its dividends per share (DPS). The company's tax rate is 25%. The company is considering issuing $3.25 million worth of bonds (at par) and using the proceeds for a stock repurchase. If issued, the bonds would have an estimated...
Most questions answered within 3 hours.
-
Two buckets of mass 17.1 kg and 11.3 kg are attached to the ends
of a...
asked 9 minutes ago -
A laser used in LASIK eye surgery produces 50 pulses per second.
The wavelength is 192...
asked 7 minutes ago -
Smith Inc. recently reported operating income of $2.75 million,
depreciation of $1.20 million, and had a...
asked 7 minutes ago -
A
nurse is trying to understand the structure and chain of command of
a healthcare organization....
asked 10 minutes ago -
A company is interested in estimating the costs of lunch
in their cafeteria. After surveying employees,...
asked 14 minutes ago -
A woman expends 94 kJ of energy in walking a kilometer. The
energy is supplied by...
asked 25 minutes ago -
Our ability to see distinct edges as well as our errors in
contrast perceptions (e.g., seeing...
asked 16 minutes ago -
you want to measure the gravitational acceleration at your
location. since g does not vary significantly...
asked 30 minutes ago -
Aside from commercial tools that are specifically geared toward
TAR/PC( Technology-Assisted Review), are there potential
alternative...
asked 32 minutes ago -
the period of a pendulum on earth is 5 seconds. what will be the
period of...
asked 48 minutes ago -
The
act of turning media against itself, such as flash mobs and
billboard is called
a....
asked 44 minutes ago -
A set of length measurements are obtained with the values 165.6
± 0.3, 165.1± 0.4,166.4± 1.0,...
asked 45 minutes ago