Question
A privately held firm called RoverX is considering an IPO and has hired you to estimate an approximate price per share of its equity. The
A privately held firm called RoverX is considering an IPO and has hired you to estimate an approximate price per share of its equity. The firm's sales are $700 million, EBITDA is $275 million and net income is $170 million. It currently has 35 million shares outstanding. The firm has $800 million in debt and cash balance of $150 million.
The following financial data for two publicly traded comparable firms are available.
All data in millions
Firm | Market Capitalization | Enterprise Value | Sales | EBITDA | Net Income |
A | $3,195 | $4,620 | $900 | $420 | $355 |
B | $1,342 | $1,800 | $550 | $235 | $122 |
What is the estimated price per share of RoverX using:
The P/E multiple
The Enterprise value-to-EBITDA multiple
The Price-to-Sales multiple
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Fundamentals of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford, David A. Stangeland, Andras Marosi
1st canadian edition
978-0133400694
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