Silicone Systems Inc. shares are trading for $500. Analysts expect Silicone to generate net income of $41.7 billion. Silicone has 900 million shares outstanding. The average P/E ratio of Silicone's competitors is 18. What is the fair price for a share of Silicone Systems? O $463 O $500 O $751 $834

Silicone Systems Inc. shares are trading for $500. Analysts expect Silicone to generate net income of $41.7 billion. Silicone has 900 million shares outstanding. The average P/E ratio of Silicone's competitors is 18. What is the fair price for a share of Silicone Systems? O $463 O $500 O $751 $834

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: Apex Corporation is considering the purchase of Pinnacle Company in a stock-for-stock exchange.…

A: Earning per share is a ratio that shows the earing of investors on each share. It's a financial…

Q: ABC Inc is currently trading at $8 per share and has 1.5 billion shares on issue. It announces a 3…

A: Solution:Right shares are the shares which are offered to the existing shareholders of the company…

Q: Martin Manufacturing stock has a market value of $45 a share. If the book value is $25 a share, the…

A: Market Value per share = $45Book Value per share = $25The market-to-book ratio is compares a…

Q: Walker Machine Tools has 6.3 million shares of common stock outstanding. The current market price of…

Q: 15. If HUS 's stock is currently trading at AED 60 and HUS has 12 million shares outstanding, total…

A: Note:- Multiple questions are asked. According to bartleby guidelines , first question needs to be…

Q: Suppose that in July 2022, Nike Inc. had EBITDA of $6,561 million, excess cash of $12,944 million,…

Q: Stump, Inc. issues a $66 million IPO priced at $17 per share, and the offering price to the public…

A: It represents the expenditures associated with underwiring and issuing securities like equity &…

Q: The following information relates to the acquisition of M plc by D plc: Recent dividend of M plc:…

A: When a company buys most of the shares of another company, it is called acquisition. Acquisition…

Q: Ocean Power Technologies has $300 million of common equity, with 12.2 million shares of common stock…

A: Solution: Market Value Added (MVA) means the difference between the market value of a firm and its…

Q: Miles Co is considering a bid for Stone Co. Both companies are stock-market listed and are in the…

A: Ordinary Shares: Ordinary shares, otherwise called equity shares, are characterized as portions of…

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: Damron, Incorporated, has 225,000 shares of stock outstanding. Each share is worth $83, so the…

A: A company may raise funds from multiple sources. A collection of all these sources constitutes the…

Q: Your company has earnings per share of $4. It has 1 million shares outstanding, each of which has a…

A: The act of combining two or more companies to create an additional advantage of being together…

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: Thermo Fisher (“Fisher”) is considering an acquisition of Life Technologies (“Life Tech”). Life Tech…

A: Number of Life Tech shares outstanding = 179.3 million Share price = $60.75Number of Fisher shares…

Q: what journal entry would be made for the following transaction? highway studios sells 10 million of…

A: Journal entries means the primary and foremost reporting of the business transactions in the books…

Q: Sona International has assets of $250 million, liabilities of $200 million and preference shares…

A: Book value per share means value of stock that is being recorded or calculated from the financial…

Q: iger Golf Supplies has $21 million in earnings with 6 million shares outstanding. Its investment…

A: Total Earning = te = $21 millionNumber of Shares = n = 6 millionPrice to Earning Ratio = pe =…

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: A company has 20,858,702 shares outstanding. In an IPO, the firm issued 3,000,000 new shares. The…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3 sub-parts of the first question.…

Q: ABC's Net Income this year was $20,650,000 and there were 19.5 million shares outstanding. If the…

A: Given, Net Income = $20650000 Shares Outstanding = 19500000

Q: The New Word Corporation has 1,000,000 shares outstanding at $45/share. If the firm wishes to raise…

A: First we need to calculate ex-right share price nowvalue of a right =Old share price – ex right…

Q: Byrd Lumber has 1 million shares of common stock outstanding and its stock price is $35 a share. On…

A: The capital structure of a firm represents different sources of finance employed in the business.…

Q: Walker Machine Tools has 6.5 million shares of common stock outstanding. The current market price of…

A: EPS (Earnings Per Share) is a financial metric that measures the company's profitability on a…

Q: Company A has earrings per share of $3 with 20 million shares outstanding. The current market price…

A: The question is based on the concept of Merger and Acquisition.

Q: Based on the corporate valuation model, SG Telecom's total corporate value is $750 million. Its…

A: Stocks are the financial security that represented by ownership in a company. Ownership of the…

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

A: In the given case, we have provided the net income, number of shares outstanding and the market…

Question

Silicone Systems Inc. shares are trading for $500. Analysts expect Silicone to generate net income of $41.7 billion. Silicone has
900 million shares outstanding. The average P/E ratio of Silicone's competitors is 18. What is the fair price for a share of
Silicone Systems?
O $463
$500
O $751
$834

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1: Given Value

VIEW

Step 2: Calculation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

(12)
Marseille Manufacturing (MM) stock is currently trading €42 per share, there are 12 million shares outstanding and I own 10% (1.2 million shares). MM is planning a SEO to raise an additional €100 million (proceeds to the firm). MM expects the stock price to drop 4% upon announcing the SEO. Assuming that 10% of the shares sold in the SEO are secondary shares, how many shares should MM plan to sell in order to receive €100 million? Assuming that I did not buy or sell any shares in the SEO, what percentage of MM will I own after the SEO?
Damron, Incorporated, has 205,000 shares of stock outstanding. Each share is worth $79, so the company’s market value of equity is $16,195,000. Suppose the firm issues 44,000 new shares at the following prices: $79, $73, and $67. What will be the ex-rights price and the effect of each of these alternative offering prices on the existing price per share?
For example, GoTo completes its IPO on April 12, 2022 and is listed on the IDX. GOTO released 40,615,056,000 shares at a selling price of Rp. 338/unit with an underwriting discount of 5%. Investors in the secondary market pay only Rp. 300 per share of GoTo's outstanding shares of 50,000,000,000. Calculate: a. Total proceeds and net proceeds for IPO GoTo b. How much does the underwriting fee cost? c. What is the market capitalization for the outstanding GoTo shares? d. Calculate IPO underpricing and explain IPO underpricing for GoTo
Top Rope Productions has 3.00 million shares outstanding that currently trade at $11.66. The firm has $16.00 million of long-term debt, and $6.00 million in cash. What is a rough estimate for the firm's enterprise value? (Express answer in millions. For example, $1,000,000 would be 1.00) Submit Answer format: Currency: Round to: 2 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?
Bin plc is taking over Sum plc and has offered two Bin shares for every three Sum shares. You have the following information: Bin plc Sum plc Current share price: £3.01 £1.48 Number of shares: 20m 10m Market value: £60.2m £14.8m Distributable earnings: £5.6m £1.23m Synergy is expected to produce a 5% increase of the combined earnings. The market will apply a price/earnings ratio of 10.75 times to the new entity. What is the expected change in the wealth of Sum's shareholders? Answers: 10.2% 15.2% 25.7% 30.3% 35.6%
An IPO is offered at $9.50 per share for 7 million shares. The IPO underwriters had a spread of 7.25%. What price did the underwriters pay per share of the IPO firm? A. $8.81 B. $9.50 C. $8.86 D. $9.17 E. $10.19

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