You are trying to value a company which had revenues of $29 million over the last twelve months. Depreciation and amortization expenses were $5 million. Operating margin is 39.7%. It has $27 million of debt, $4 million in cash, and 5 million shares outstanding. Comparable companies are trading at an average trailing EV/EBITDA multiple of 11. How much is each share worth using the relative valuation method? a. $53.1 b. $31.7 c. $26.4 O d. $18.6 O e. $20.6 O f. $18.0 O g. $38.6
You are trying to value a company which had revenues of $29 million over the last twelve months. Depreciation and amortization expenses were $5 million. Operating margin is 39.7%. It has $27 million of debt, $4 million in cash, and 5 million shares outstanding. Comparable companies are trading at an average trailing EV/EBITDA multiple of 11. How much is each share worth using the relative valuation method? a. $53.1 b. $31.7 c. $26.4 O d. $18.6 O e. $20.6 O f. $18.0 O g. $38.6
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:QUESTION 16
You are trying to value a company which had revenues of $29 million over the last twelve months. Depreciation and amortization expenses were
$5 million. Operating margin is 39.7%. It has $27 million of debt, $4 million in cash, and 5 million shares outstanding. Comparable companies are
trading at an average trailing EV/EBITDA multiple of 11. How much is each share worth using the relative valuation method?
O a. $53.1
O b. $31.7
O C. $26.4
O d. $18.6
O e. $20.6
f. $18.0
g. $38.6
h. $34.6
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