3 Company J is a private firm. You are trying to estimate J's stock price using information from its comparable firm: Company K. The table below shows selected financials for Company J and K. Stock Company Price per Share J K $16 O $4 O $12 $30 O $8 # of shares outstanding (millions) Assuming neither company has any preferred stock. If we assume that both J and K have the same market-to-book ratios, company J's stock price should be set at 10 3 Shareholders'. Equity (from the balance sheet, in millions) $80 $60

Company J is a private firm. You are trying to estimate J's stock price using information from its comparable firm: Company K. The table below shows selected financials for Company J and K. Assuming neither company has any preferred stock. If we assume that both J and K have the same market-to-book ratios, company J's stock price should be set at $16 $4 $12 $8