Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. 2. After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios: EJH Enterprises has EPS of

1.

image text in transcribed

2.

image text in transcribed

After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios: EJH Enterprises has EPS of $1.80, EBITDA of $290 million, $28 million in cash, $45 million in debt, and 101 million shares outstanding. What range of prices is consistent with both sets of multiples? The range of prices will be: Lowest price within both ranges, the P/E and EV/EBITDA ranges, is $. (Round to two decimal places.) Highest price within both ranges, the P/E and the EV/EBITDA ranges, is $ (Round to two decimal places.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Shatin Intl. has 10 million shares, an equity cost of capital 14%, and is expected to pay a total dividend of $25 million each year forever. It announces that it will increase its payout to shareholders. Instead of increasing its dividend, it will keep it constant and will start repurchasing $10 million of stock each year as well. How much will its stock price increase? The stock price will increase by $ (Round to the nearest cent.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Trade Finance

Authors: Tarsem Bhogal, Arun Trivedi

2nd Edition

303024542X, 9783030245429

More Books

Students also viewed these Finance questions

Question

10. For what is a risk radar most useful?

Answered: 1 week ago