Question

Help appreciated. thank you!

Ahor researching the competitors of EJ Enterprises, you determine that most comparable firms have the following valuation ratios Comp 1 Comp 2 Comp) Comp 4 EVERITDA 12 11 125 PE EJH Enterprises has EPS of $200, EBITDA of $295 million, 520 milion in cash, 41 milion in debt, and 103 million shares outstanding. What range of price is consistent with both sets of multiples? The range of prices will be Lowest price within both ranges, the P/E and EVEBITDA ranges, is $ Highest price within both ranges, the P/E and the EVEBITDA ranges in (Round to two decimal places) (Round to two decimal places.)

Answer 1

There is no reason to expect different multiples to produce completely consistent estimates.In this case , one produces estimates from 28.52 to 35.68 and the other produces estimates from 34 to 40.

EVI EBITDA Corp 1 Comp 2 Comp3 Cray 12 u 12.5 10 19 18 2017 Enterprise value = ( Ev/ EBITDA *295)+3528 32 33 36755 29-41 Equity value /103 LValue 1103 24-25 31.28 35:18 28.52 138 36 40 34 | To nee get an idea of what satisfies both, deaw the inthwals. The shaded oin represente the itewal that sikhe both sete. D 28.52 35. 68 40 The lange consistent with both sets would be $34.00 to $35.68. This includes the smallest value that is wishin both the P/E and EV/EBITDA ranges $34) and the highest value rgey ( 9 x5-6 р) b6 В Л