Cleanex Ltd is a listed company that provides professional cleaning services. It has 50 million shares outstanding and a current share price of $16.00. Its book value of equity is $400 million and its earnings per share (EPS) are $1.00. Use this information to help answer the questions that follow. (a) Cleanex's market-to-book ratio is Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is 1.234, type in 1.23). (b) The table below displays information relating to other firms in the cleaning industry. Ticker Earnings per Price per Share Share $52 Company WipeAway Ltd Spotless Ltd Clear Ltd WashOff Ltd RinseDown Ltd WPA SPT CLR WSO RSD $41 $63 $38 $3.50 $2.50 $4.30 $4.80 $3.80 You want to use this information to perform a relative valuation of Cleanex's shares. Based upon the average P/E ratio for its industry, Cleanex's implied equity value per share is $ Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is $1.234, type in 1.23).
Cleanex Ltd is a listed company that provides professional cleaning services. It has 50 million shares outstanding and a current share price of $16.00. Its book value of equity is $400 million and its earnings per share (EPS) are $1.00. Use this information to help answer the questions that follow. (a) Cleanex's market-to-book ratio is Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is 1.234, type in 1.23). (b) The table below displays information relating to other firms in the cleaning industry. Ticker Earnings per Price per Share Share $52 Company WipeAway Ltd Spotless Ltd Clear Ltd WashOff Ltd RinseDown Ltd WPA SPT CLR WSO RSD $41 $63 $38 $3.50 $2.50 $4.30 $4.80 $3.80 You want to use this information to perform a relative valuation of Cleanex's shares. Based upon the average P/E ratio for its industry, Cleanex's implied equity value per share is $ Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is $1.234, type in 1.23).
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
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Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Cleanex Ltd is a listed company that provides professional cleaning services. It has 50 million shares outstanding
and a current share price of $16.00. Its book value of equity is $400 million and its earnings per share (EPS) are
$1.00. Use this information to help answer the questions that follow.
(a) Cleanex's market-to-book ratio is
Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is
1.234, type in 1.23).
(b) The table below displays information relating to other firms in the cleaning industry.
Ticker
Earnings per
Price per
Share
Share
$52
Company
WipeAway Ltd
Spotless Ltd
Clear Ltd
WashOff Ltd
RinseDown Ltd
WPA
SPT
CLR
WSO
RSD
$41
$63
$38
$3.50
$2.50
$4.30
$4.80
$3.80
You want to use this information to perform a relative valuation of Cleanex's shares. Based upon the average P/E
ratio for its industry, Cleanex's implied equity value per share is $
Note: Please provide your answer with two decimal points in the format of xx.xx (for example, if the answer is
$1.234, type in 1.23).
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