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 MV firm/sales (X) Tax rate) (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) Stryker's implied stock value 9,821 1,810 357 93.66 2,195 24.70% 9,087 2,780 Stryker 17.8 18.4 3.5 3.2 2.0 BAX 17.8 22.5 3.1 4.8 1.8 BDX 23.9 22.9 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 20.3 20.5 3.5 3.3 2.1 MDT 13.7 16.7 4.3 3.1 1.8 SNN 22.0 24.3 3.8 4.0 3.1 STJ 22.9 25.8 4.7 3.9 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 MV firm/sales (X) Tax rate) (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) Stryker's implied stock value 9,821 1,810 357 93.66 2,195 24.70% 9,087 2,780 Stryker 17.8 18.4 3.5 3.2 2.0 BAX 17.8 22.5 3.1 4.8 1.8 BDX 23.9 22.9 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 20.3 20.5 3.5 3.3 2.1 MDT 13.7 16.7 4.3 3.1 1.8 SNN 22.0 24.3 3.8 4.0 3.1 STJ 22.9 25.8 4.7 3.9 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
Problem 1PS
Related questions
Question
S6.
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)
Stryker's implied
stock value
9,821
1,810
357
2,195
24.70%
9,087
2,780
93.66
Stryker
17.8
18.4
3.5
3.2
2.0
BAX
17.8
22.5
3.1
4.8
1.8
BDX
23.9
22.9
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
20.3
20.5
3.5
3.3
2.1
MDT
13.7
16.7
4.3
3.1
1.8
SNN
22.0
24.3
3.8
4.0
3.1
STJ
22.9
25.8
4.7
3.9
2.1
ZMH
20.8
21.5
3.8
2.5
1.8
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!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 2 images
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