ock Corp. has a EBITDA of $1,000 and is in an industry where EV/EBITDA multiples are generally 8.0x. Rock has Net Debt of $4,000 and 2,000 shares outstanding, what is an approximate value of Rock Corp's stock price per share? a) $1 b) $2 c) $3 d) $4

ock Corp. has a EBITDA of $1,000 and is in an industry where EV/EBITDA multiples are generally 8.0x. Rock has Net Debt of $4,000 and 2,000 shares outstanding, what is an approximate value of Rock Corp's stock price per share? a) $1 b) $2 c) $3 d) $4

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

See similar textbooks

Related questions

Q: let's assume Company XYZ has the following characteristics: Shares Outstanding: 1,000,000 Current…

A: Enterprise valuation can be calculated by using this equation Enterprise value =Market…

Q: Use these data to calculate the value of Imperial's preferred equity, common equity and Debt .…

A: The capital structure of a company refers to the way a company finances its overall operations and…

Q: The market capitalization of Big Bang Corp. is $364,000 at the company's most recent trade of $4.00…

A: Market capitalization is multiple of market price and number of stock outstanding. Therefore formula…

Q: Help ple

A: Step 1:We have to calculate the market to book ratio. The formula of market-to-book…

Q: The book value of a company is $15 per share and the total commonstockholders’ equity is $45…

A: Common stock is the share of a company that gives ownership to a portion of the company. Companies…

Q: tockton Mineral Operations (SMO) currently has 310,000 shares of stock outstanding that sell for $94…

A: As per the Honor code of Bartleby we are bound to given the answer of first three sub part only,…

Q: Epsilons Inc. has EBITDA of $2.3M and SOK shares outstanding. It also has $5M in cash and $2M in…

A: ParticularsEV (a)EBITDA (b)EBITDA Multiple…

Q: PROBLEM EXERCISES: If you are an investor, identify the minimum number of shares you can buy and…

A: Formulation is shown:

Q: Micro Corp. has 1,000,000 shares of common stock outstanding and i (i.e. the bond price is 1.16…

A: Total value of common stock = (1,000,000 * 50) = $50 millionTotal value of Debt = 20,000 * (1,000 *…

Q: MV Corporation has debt with market value of $103 million, common equity with a book value of $105…

A: Weighted Average Cost of Capital:Weighted Average Cost of Capital (WACC) is a financial metric used…

Q: ABC Corporation has a total debt of $12,240,000 and their cash balance is equal to 10% of their…

A: Shareholder Equity Shareholders' equity (or corporate net worth) is a measurement of how much money…

Q: Company A has 4 million shares outstanding and its net income stood at $35 million. The current…

A: The price-to-earnings (P/E) ratio is a financial metric used to evaluate a company's valuation by…

Q: What would be the weight used for equity in the computation of OMG's WACC? (Round your answer to 2…

A: WACC: It is the average cost of capital for the firm to raise capital from different sources like…

Q: Vespa, PLC has 63,000 shares outstanding. If the market capitalization of the company is $315,000,…

A: Market capitalization is the market value of company's equity. It is the aggregate value of a…

Q: An investor is deciding whether to purchase 5,000 ABC Inc. shares which has an EPS ratio of P75. He…

A: Price which the investor should pay should be the price as per the PE ratio of the industry minus…

Q: What is the weight of the preferred stock as it relates to the firm s weighted average cost of…

A: Information Provided: Bonds face value = $420,000 Selling price of bonds = $357,000 ($420,000 * 85%)…

Q: Bermuda Triangle Corporation (BTC) currently has 570,000 shares of stock outstanding that sell for…

A: Stock split used to happen at the time of the company, which used to increase the number of shares…

Q: Suppose that Home Depot, Inc. (HD) is currently holding shares of Apple Inc. (AAPL) and Autozone…

A: To find the per-share value of Home Depot, Inc. (HD) based on its holdings in Apple Inc. (AAPL) and…

Q: Nelson's Landscaping has 1,200 bonds outstanding that are selling for $990 each. The company also…

A: The weighted average cost of capital is a financial measure that represents the average cost of a…

Q: MV Corporation has debt with market value of $97 million, common equity with a book value of $102…

A: Debt = 97 millionPreferred stock = 20 millionCommon stock= Number of shares * Market Price per…

Q: MV Corporation has debt with market value of $95 million, common equity with a book value of $101…

A: The objective of the question is to calculate the weight of preferred stock in the Weighted Average…

Q: What would be the weight used for equity in the computation of OMG's WACC? (Round your answer to 2…

A: Given, No.of shares outstanding Common Stock = 7 million Preferred stock = 5 million Bonds = 4000…

Q: V Corporation has debt with market value of $95 million, common equity with a book value of $101…

A: Capital weight refers to the proportion of the components that are being assigned as per the value…

Q: Jimmy Shoes Inc. has 10,000 shares outstanding with a stock price of $40 per share. The current…

A: For EBIT at indifference point between the capital structures we have to calculate using the formula…

Q: assume an analyst has valued a stock at $59.75 per share. What was the NPV of the firm if there are…

A: Value of stock = $59.75 per shareNumber of shares outstanding = 3,500,000Value of debt = $24,000,000

Q: Book Co. has 1.3 million shares of common equity with a par (book) value of $1.30, retained earnings…

A: The objective of the question is to calculate the market value of the equity of Book Co.

Q: Book Co. has 1.3 million shares of common equity with a par (book) value of $1.30, retained earnings…

A: The objective of the question is to calculate the market value of equity, the market value of debt,…

Q: ABC Corporation ordinary shares have total market value of P4,000,000 and annual revenues of…

A: Given: Value ABC = P4000,000 Annual revenue ABC = P7500000 Undervalued by = P200000 Annual Revenue…

Q: Quincy Martin Manufacturing has assets of $5 million and liabilities of $3 million. The company has…

A: Solution:Book value per share refers to the equity available to common shareholders per share.So,…

Q: stock price of $40 per share. The current weighted average cost of capital is 7%. It also carries…

Q: Verne Corporation has sales of $90952, net income of $788170, total assets of $2039191, and 90952…

A: Formula of P/E Ratio:P/E Ratio= Current market priceEarning per share Importance of P/E Ratio By…

Q: Company Tyza has a Net income of $15,831,600 and 11,000,000 outstanding shares. It also has…

A: The question is based on the concept Earning per share

Q: Based on the corporate valuation model, Morgan Inc.'s total corporate value is $200 million. The…

A: First we need to calculate the equity market value by using equation below.Market value of Equity =…

Q: for RuNutz Corp: Revenues = $125 million; Cost excluding depreciation = $17 million; Depreciation =…

A: Cash flow that arises from the core business activities and operating activities is the cash flow…

Q: BK Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of…

A: Outstanding shares means the stock of the business which is held presently through its shareholders,…

Q: Mitchell Co. has $1.1 million of debt, $2 million of preferred stock, and $1.8 million of common…

A: A firm can finance its business operations through various sources of capital such as debt and…

Q: OMG Inc. has 4 million shares of common stock outstanding, 3 million shares of preferred stock…

A: In the given case, we have provided the number of common stock outstanding, preferred stock…

Q: Silicone Systems Inc. shares are trading for $500. Analysts expect Silicone to generate net income…

A: Net Income = ni = $41.7 billionNumber of Share = n = 900 millionPrice / Earning Ratio = pe = 18

Question

Rock Corp. has a EBITDA of $1,000 and is in an industry where EV/EBITDA multiples are generally 8.0x. Rock has Net Debt of $4,000 and 2,000 shares outstanding, what is an approximate value of Rock Corp's stock price per share?

a) $1

b) $2

c) $3

d) $4

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Globex Corp.'s debt has a market value of $147,267 million, and Globex Corp. has no preferred stock. If Globex Corp. has 225 million shares of common stock outstanding, what is Globex Corp.'s estimated intrinsic value per share of common stock? (Note: Round all intermediate calculations to two decimal places.)
Brookman Inc's latest EPS was $2.75, its book value per share was $22.75, it had 275,000 shares outstanding, and its debt/total invested capital ratio was 44%. The firm finances using only debt and common equity, and its total assets equal total invested capital. How much debt was outstanding? Do not round your intermediate calculations. a. $5,013,938 b. $4,571,531 c. $4,768,156 d. $5,358,031 e. $4,915,625
Company E has 4 million shares of stock outstanding, 1 million shares of preferred stock, and 20,000 bonds. If the common shares sell for $28 per share, the preferred shares sell for $18.50 per share, and the bonds are selling for 97% of par, what would be the weights used in the calculation of Company E’s Weighted Average Cost of Capital (WACC)?
NFG investment company that has 4 million shares outstanding has total assets of $62 million and total liabilities of $12 million. If this investment company charges a load of 3.5%, how much would an investor have to pay to purchase one share? . (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))
XYZ Co. has 100,000 shares of stock outstanding; total current assets is P2,050,000, P455,000 of which is cash; total current liabilities is P900,000. There is no outstanding dividends payable. Assuming XYZ Co. maintains aminimum current ratio of 2 and that the above accounts will remain unchanged except cash, what is the maximum dividends per share that XYZ Co. can pay in cash? A. P2.50 B. P3.35 C. P3.80 D. P72.05 E. answer not given
Byrd Lumber has 2 million shares of stock outstanding. On the balance sheet the company has $39 million worth of common equity. The company's stock price is $23 a share. What is the company's Market Value Added (MVA)? If negative, use the negative sign instead of parentheses, e.g. -130,000.
Flimsy Safe Room’s, Inc. has total assets of $1,000,000. The firm has $100,000 in inventory. It has $300,000 in long-term debt and $400,000 in current assets. The common stockholders’ equity is $400,000. The firm does not have any preferred stock outstanding. What is Flimsy Safe Room's total debt ratio defined as total liabilities to total assets? Question 1 options: A) 0.6 = 60% B) 0.4 = 40% C) 0.5 = 50% D) 0.3 = 30%
Book Co. has 1.7 million shares of common equity with a par (book) value of $1.45, retained earnings of $28.4 million, and its shares have a market value of $49.09 per share. It also has debt with a par value of $19.6 million that is trading at 105% of par. a. What is the market value of its equity? b. What is the market value of its debt? c. What weights should it use in computing its WACC? a. What is the market value of its equity? The market value of the equity is $ __ million (Round to two decimal places.) b. What is the market value of its debt? The market value of the debt is $ __ million. (Round to two decimal places.) c. What weights should it use in computing its WACC? The debt weight for the WACC calculation is __ % ? (Round to two decimal places.) The equity weight for the WACC calculation is __ % ? (Round to two decimal places.)
The market capitalization of Morning Rose Corp. is $5,580,000 at the company's most recent trade of $9.00 per share. How many shares of stock are outstanding?
Manufacturer ABC has earnings per share of $3.30 and EBITDA of $40.7 million. The company also has 6.4 million shares outstanding. You believe that XYZ Corporation is comparable to ABC in terms of its underlying business, and it has a P/E of 14.3. Estimate the value of ABC’s shares using P/E as a valuation multiple (to the closest integer)
Company ABC has a market capitalization of $750 million, Book Value (Shareholder’s Equity) Per share of $15 and net income of $25 million. If the stock is currently trading at $30. The Return on Equity is: 3.3% 6.7% 9.3% 50.0%
The book value per share of Topaz General Ltd. is $10 per share and the company has a total of 4 million shares. Calculate the total book value of common equity of the company. a. $10 million b.$40 million OC. $400 million Cd. $4 million. e.$100 million

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

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

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

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

SEE MORE TEXTBOOKS