Stryker Corporation is a leading medical technology company headquartered in Kalamazoo, Michigan, that trades on the New York Stock Exchange. Use the following information on Stryker and seven other similar companies (indicated by their ticker symbols) to value Stryker’s common stock as of December 31, 2013.

Stryker Corp. ($ millions)

Sales 9,021 Net income 1,616 Number of common shares (millions) 378 Earnings before interest and tax 2,163 Tax rate 22.3%

Book value of equity 9,047 Book value interest-bearing debt 2,764 Stryker BAX BDX COV MDT SNN STJ ZMH Comparison of Stryker with comparable companies:

5-year growth rate in sales (%) 6.1 4.3 2.4 0.6 4.2 2.7 4.7 2.9 5-year growth rate in EPS (%) 8.4 3.0 0.9 3.5 11.6 7.7 17.8 4.5 Analysts’ projected growth (%) 9.1 8.0 9.0 NA 6.6 9.9 10.7 8.4 Interest coverage ratio (X) 15.6 12.2 7.8 10.8 12.0 81.2 10.7 15.0 Total liabilities to assets (%) 42.5 67.2 58.5 53.6 46.4 30.5 57.0 34.2 Total assets ($ millions) 15,743 25,869 12,035 19,619 37,231 5,819 10,248 9,581 Indicators of Value Price/earnings (X) 17.8 18.8 23.1 20.3 15.8 23.2 24.6 20.8 MV firm/EBIT(1–Tax rate) (X) 18.5 21.7 23.9 20.5 17.7 23.5 28.1 21.5 MV firm/sales (X) 3.5 3.1 3.1 3.5 4.1 3.0 3.9 3.8 MV equity/BV equity (X) 3.1 4.5 4.2 3.3 2.9 3.2 4.1 2.5 MV firm/BV firm (X) 2.0 1.8 2.1 1.8 1.8 2.3 2.1 1.8

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