A client would also like you to estimate the value of a private company in which she has invested. The company has 1.5 million shares of common stock outstanding. You and client have discussed the earnings history and the outlook for future earnings. You agree that for valuation purposes you will use trailing 4 quarters earnings per share of $5. Your research indicates that the Price Earnings Ratio for comparable publicly traded companies is 18. Using the PE benchmark approach, what A.) .$90,000,000 B.) S 225.000.000 C.) $150.000 D.) $135.000.000 is the value of the company? Show all work!
A client would also like you to estimate the value of a private company in which she has invested. The company has 1.5 million shares of common stock outstanding. You and client have discussed the earnings history and the outlook for future earnings. You agree that for valuation purposes you will use trailing 4 quarters earnings per share of $5. Your research indicates that the Price Earnings Ratio for comparable publicly traded companies is 18. Using the PE benchmark approach, what A.) .$90,000,000 B.) S 225.000.000 C.) $150.000 D.) $135.000.000 is the value of the company? Show all work!
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 66P
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