Now choose one of your firms and look up other firms in the same industry. Perform a “Valuation by Comparables” analysis by looking at the price/earnings, price/book value, price/sales, and price/cash flow ratios of the firms relative to each other and to the industry average.

Which of the firms seem to be overvalued? Which seem to be undervalued? Can you think of reasons for any apparent mispricing? P-69