"Company B, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Company B had revenues of $60 Millions of USDs and earnings of $40 of Millions of USDs. Company B has filed a registration statement with the SEC for its IPO. If the industry average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 10 and 0.7 respectively. Estimate the IPO price for Company B using the Price/Earnings ratio and assuming that they will issue 10 Million shares."
"Company B, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Company B had revenues of $60 Millions of USDs and earnings of $40 of Millions of USDs. Company B has filed a registration statement with the SEC for its IPO. If the industry average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 10 and 0.7 respectively. Estimate the IPO price for Company B using the Price/Earnings ratio and assuming that they will issue 10 Million shares."
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
Related questions
Question
Sh3
Transcribed Image Text:QUESTION 13
"Company B, is a private company that designs, manufactures and distributes certain consumer
products. In this fiscal year, Company B had revenues of $60 Millions of USDs and earnings of $40 of
Millions of USDs. Company B has filed a registration statement with the SEC for its IPO. If the industry
average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 10 and 0.7
respectively. Estimate the IPO price for Company B using the Price/Earnings ratio and assuming that
they will issue 10 Million shares."
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education