Question

QUESTION 2 Partially correct Marked out of 1.00 Rag question Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. in millions) Company assumed value Equity assumed value NOPAT Net income Nec nonoperating obligations fassels Common shares outsianding Applied Materials 1,444 $1,377 $(1,369) 1,160.0 KLA Tencor $10,000 $9,197 440 $479 803 157.9 Lam Research 11,739 $13,454 $674 $769 (1,715) 158.5 a. Compute the price to net income ratio for both KLA Tencor Corporation and Lam Research Round answers to two decimal places, when applicable. Price to Net income ratio KLA Tenco 19.2 Lam Research 17.5 b. Use KLA Tencor Corporation and Lam Research Corporation as comparables, along with the price to net income ratios from part a, and then estimate for Applied Materials Inc. its equity intrinsic value and its equity intrinsic value per share. . Round equity intrinsic value to the nearest million. . Round equity intrinsic value per share to two decimal places. KLA Tencor Corporation Equity intrinsic value 1160 l Equity intrinsic value pér share 1160X Check

(Module 15 Question 2) Please answer all questions with a red X next to them. Thank you!

Answer 1

Price to Net Income Ratio for KLA Tencor= 19.2

Price to Net Income Ratio for LAM Research= 17.5

Price to Net Income Ratio for Applied Materials= 18.6 (assume)

1377 = 18.6

T-18.6 * 1377

т = 25612

Equity Intrinsic Value= $25,612

Equity Intrinsic Value per share=

25612 1160

                                             = 22.08