Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the 7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data Stryker Corporation ($ millions) Sales Net income Number of common shares (millions) Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt Indicators of Value Price/earnings (X) MV firm/EBIT (1 - Tax rate) (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) Indicators Price/earnings (X) MV firm/EBIT(1 - Tax rate) (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) 10,021 1,592 359 2,203 25.30% 9,097 2,784 Stryker's implied stock value Stryker 17.8 18.5 3.5 3.3 2.0 BAX 18.1 22.7 3.1 5.0 1.8 BDX 24.3 23.3 3.1 4.2 2.1 COV 20.5 20.5 MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity. Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places. 3.5 3.3 2.3 MDT 13.9 16.9 4.3 3.0 1.8 SNN 22.2 24.5 4.0 4.2 3.3 STJ 23.1 26.0 4.9 4.1 2.1 ZMH 20.8 21.5 3.8 2.5 1.8
Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the 7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data Stryker Corporation ($ millions) Sales Net income Number of common shares (millions) Earnings before interest and tax Tax rate Book value of equity Book value interest-bearing debt Indicators of Value Price/earnings (X) MV firm/EBIT (1 - Tax rate) (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) Indicators Price/earnings (X) MV firm/EBIT(1 - Tax rate) (X) MV firm/sales (X) MV equity/BV equity (X) MV firm/BV firm (X) 10,021 1,592 359 2,203 25.30% 9,097 2,784 Stryker's implied stock value Stryker 17.8 18.5 3.5 3.3 2.0 BAX 18.1 22.7 3.1 5.0 1.8 BDX 24.3 23.3 3.1 4.2 2.1 COV 20.5 20.5 MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity. Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places. 3.5 3.3 2.3 MDT 13.9 16.9 4.3 3.0 1.8 SNN 22.2 24.5 4.0 4.2 3.3 STJ 23.1 26.0 4.9 4.1 2.1 ZMH 20.8 21.5 3.8 2.5 1.8
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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Transcribed Image Text:Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York
Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to
calculate Stryker's implied stock value using each of the 5 indicators of value provided in the chart below. Use the mean values for the
7 other similar companies in the industry as the benchmark to calculate Stryker's implied stock value using its financial data
Stryker Corporation ($ millions)
Sales
Net income
Number of common shares (millions)
Earnings before interest and tax
Tax rate
Book value of equity
Book value interest-bearing debt
Indicators of Value
Price/earnings (X)
MV firm/EBIT (1 - Tax rate) (X)
MV firm/sales (X)
MV equity/BV equity (X)
MV firm/BV firm (X)
Indicators
Price/earnings (X)
MV firm/EBIT(1 - Tax rate) (X)
MV firm/sales (X)
MV equity/BV equity (X)
MV firm/BV firm (X)
10,021
1,592
Stryker's implied
stock value
359
2,203
25.30%
9,097
2,784
Stryker
17.8
18.5
3.5
3.3
2.0
BAX
18.1
22.7
3.1
5.0
1.8
BDX
24.3
23.3
3.1
4.2
2.1
MV = Market value; BV = Book value. Market value is estimated as book value of interest-bearing debt + market value of equity.
Note: Round your intermediate calculations to 1 decimal place. Round your final answers to 2 decimal places.
COV
20.5
20.5
3.5
3.3
2.3
MDT
13.9
16.9
4.3
3.0
1.8
SNN
22.2
24.5
4.0
4.2
3.3
STJ
23.1
26.0
4.9
4.1
2.1
ZMH
20.8
21.5
3.8
2.5
1.8
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