A firm has the following summary balance sheet and income statement (in millions): Net operating assets ....
Question:
A firm has the following summary balance sheet and income statement (in millions):
Net operating assets .... $469
Net financial obligations .. 236
Common equity ..... $233
Operating income ...... $ 70
Net financial expense .... 14
Earnings ......... $56
The firm held the same amount of net financial obligations during the whole year for which the earnings were reported. The equity of this firm trades at a P/B ratio of 2.9. The firm pays no dividends.
a. Calculate the levered P/E ratio for this firm.
b. Calculate the enterprise P/B and P/E ratios.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Value of the equity 233 x 29 6757 Value of the operat...View the full answer
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