Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • How would AMZN’s Enterprise Value change if the ratios were equal to the average of its peers?

Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • How would AMZN’s Enterprise Value change if the ratios were equal to the average of its peers?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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QUESTION 7 Which of the following companies will probably have the highest decline in profit if the economy goes into recession? O A company with a DOL = 5.7 A company with a DOL = 2.5 A compnay with a DOL = 5.8 A company with a DOL = 5.5
ences Mc Graw Hill ! 1 Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year's operations of the two firms he is considering and give him some business advice. Q Variable cost per unit (a) Sales revenue (8,400 units × $31.00) Variable cost (8,400 units x a) Contribution margin Fixed cost Net income Required Required B Company Name Operating leverage 7 2 Required a. Use the contribution margin approach to compute the operating leverage for each firm. b. If the economy expands in coming years, Larson and Benson will both enjoy a 10 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will…
Exercise 13.3 P416-445 a. Calculate the price of a firm with a plowback ratio of 0.60 if its ROE is 20%. Current earnings E₁, will be $5 per share, and k = 12.5%. b. What if ROE is 10%, which is less than the market capitalization rate? Compare the firm's price in this instance to that of a firm with the same ROE and E, but a plowback rate of b = 0.
Question 10: • Problem • Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • Is Amazon underpriced or overpriced compared to its peers?
fast QUESTION 9 A company has a Return on Equity of 0.2, a Profit Margin of 0.12 and Total Asset Turnover of 0.48. Using this information calculate the Equity Multiplier?
QUESTION 3 Warwickshire plc is appraising a new project in a different line of business to its core operations. It has identified a suitable company, Nottingham plc, to use as a proxy. Details are as follows: Equity beta of Nottingham 1.250 Market value of Nottingham's debt: £39m Market value of Nottingham's equity: £45m Corporation Tax rate (both companies): 30% If Warwickshire is finance by £188m of equity and £95m of debt what would a suitable proxy equity beta for Warwickshire plc to use in the appraisal process? OA. 1.053 О в. 1.182 O.0.778 OD.1.486 O E. 1.504
Please send complete handwritten solution for Q8 only handwritten solution accepted
B18 1 2 15 16 Company Data 3 Claythorne International 4 Rogers and Rogers Capital 5 Wargrave Limited 6 Seton, Lombard, and Marston Incorporated 7 8 Market Data 9 The Market 10 11 12 Required: 13 Note: Use cells A2 to C10 from the given information to complete this question. 14 17 A Risk-Free Rate B 18 Claythorne International 19 Rogers Rogers Capital Alpha 1.25% 0.85% 1.71% -0.18% Expected Return 9.50% 3.32% C Expected Return Beta 1.1000 1.5500 1.8500 -0.2000 Risk 22.71% 0.00% Using the information in the tables above, please calculate the expected excess return for this security using a single-factor model. D E F 20 Wargrave Limited 21 Seton, Lombard, and Marston Incorporated 22 23 24 25 Students: The scratchpad area is for you to do any additional work you need to solve this question or can be used to show your work. 26 Nothing in this area will be graded, but it will be submitted with your assignment. 27 28
K1
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Problem 19.17 If projected sales growth is actually 8.80%, Calculate the EFN. (Refer to Exhibits 19.10 and 19.11.) (Round answer to 2 decimal places, e.g. 0.45. Enter negative amount using either a negative sign preceding the number e.g. -0.45 or parentheses e.g. (0.45).) Exhibit 19.10 Empire Enterprises: Pro Forma Income Statement and Balance Sheet ($ millions) Income Statement Net sales $ 120.0 Costs 108.0 Net income $ 12.0 Dividends 24 $ 7.2 Additions to retained earnings $ 4.8 Balance Sheet Assets Liabilities and Stockholders' Equity Change Change Assets $ 60.0 S 10.0 Total debt $ 20.0 $0.0 4.8 Equity Total liabilities and stockholder's equity 34.8 Total assets $ 60.0 $ 10.0 $ 54.8 $ 5.2 $ 4.8 External financing needed (EFN) $ 5.2 The pro forma balance sheet for Empire Enterprises does not balance, and the difference is the amount of EFN. Because the company's board does not wish to issue common stock, the funding will have to take the form of long-term debt.

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