You are assigned to determine a fair value for General Intelligence (GI) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The total asset value of the company is 1100 million dollars and the liability is 200 million dollars. The company has 25 million shares outstanding. Gl also generated 990-million-dollar-revenue in the current year. In a typical year, company's return on equity is 14 percent. You gathered the following three multiples from a close competitor of GI The P/E (Price-Earnings) ratio is 23, Price to sales (P/S) is 3.8, and price to book (P/B) ratio is 5.5. Based on information given about Gl and its competitor, determine the value of Gl using market multiples approach. Based on your analysis, what is the fair value of Gl using P/S multiple?

You are assigned to determine a fair value for General Intelligence (GI) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The total asset value of the company is 1100 million dollars and the liability is 200 million dollars. The company has 25 million shares outstanding. Gl also generated 990-million-dollar-revenue in the current year. In a typical year, company's return on equity is 14 percent. You gathered the following three multiples from a close competitor of GI The P/E (Price-Earnings) ratio is 23, Price to sales (P/S) is 3.8, and price to book (P/B) ratio is 5.5. Based on information given about Gl and its competitor, determine the value of Gl using market multiples approach. Based on your analysis, what is the fair value of Gl using P/S multiple?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 64P: Albion Inc. provided the following information for its most recent year of operations. The tax rate...

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