Using the information in the following chart, and PE Multiples, what is the per-share intrinsic value of Firm A's equity? That is, calculate the estimated per-share intrinsic value of Firm A's equity using the price-to-earnings (P/E) multiples below. Note: You should form (separate value estimates using the average price-to-book ratio and average price-to-earnings ratio for three comparables (Firms B, C and D) Book Value of Share Price (5) Shares Outstanding Common Equity (5) Earnings Per Share (EPS) (5) 2,000,000 20,000,000 8.00 Firm A 100.00 Firm B 200.00 3,000,000 50,000,000 14.00 Firm C 400.00 6,000,000 160,000,000 30.00 Firm D 800.00 12,000,000 880,000,000 60.00 A $100 B $126.36 C) $142.90 $109.21
Using the information in the following chart, and PE Multiples, what is the per-share intrinsic value of Firm A's equity? That is, calculate the estimated per-share intrinsic value of Firm A's equity using the price-to-earnings (P/E) multiples below. Note: You should form (separate value estimates using the average price-to-book ratio and average price-to-earnings ratio for three comparables (Firms B, C and D) Book Value of Share Price (5) Shares Outstanding Common Equity (5) Earnings Per Share (EPS) (5) 2,000,000 20,000,000 8.00 Firm A 100.00 Firm B 200.00 3,000,000 50,000,000 14.00 Firm C 400.00 6,000,000 160,000,000 30.00 Firm D 800.00 12,000,000 880,000,000 60.00 A $100 B $126.36 C) $142.90 $109.21
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
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Transcribed Image Text:Using the information in the following chart, and PE Multiples, what is the per-share intrinsic value of Firm A's equity? That is,
calculate the estimated per-share intrinsic value of Firm A's equity using the price-to-earnings (P/E) multiples below. Note: You should
form (separate value estimates using the average price-to-book ratio and average price-to-earnings ratio for three comparables
(Firms B, C and D)
Book Value of
Share Price (5)
Shares Outstanding
Common Equity (5)
Earnings Per Share
(EPS) (5)
2,000,000
20,000,000
8.00
Firm A
100.00
Firm B
200.00
3,000,000
50,000,000
14.00
Firm C
400.00
6,000,000
160,000,000
30.00
Firm D
800.00
12,000,000
880,000,000
60.00
A $100
B $126.36
C) $142.90
$109.21
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