A) What is the enterprise value of Walmart? (express answer as xx.xx billion)
B) What is the enterprise value/EBITDA multiple for Walmart?
C) Based on the EBITDA reported for Target, what is an estimate for Target’s enterprise value using Walmart’s enterprise value/EBITDA multiple?
D) Using Target's financial data and their implied value using multiples, what is an estimate for their share price?
Homework Answers
A
| Enterprise value = Equity value+ MV of debt |
| - Cash & Cash Equivalents |
| Enterprise value = 258.6+58.3-9.67 |
| Enterprise value = 307.23 |
B
EV/EBIDTA = 307.23/40.87
=
| 7.52 |
C
Target EV = EV/EBIDTA*EBIDTA = 7.52*7.97
=
| 59.93 |
D
| Enterprise value = Equity value+ MV of debt |
| - Cash & Cash Equivalents |
| 59.59 = Equity value+14.53-1.91 |
| Equity value = 46.97 |
| share price = equity value/number of shares |
| share price = 46.97/0.65 |
| share price = 72.26 |
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