Ashley, who just joined XYZ Investments, an investment bank that helps companies in their initial public offerings (IPO) to sell their shares to the public. Her job is to determine the initial price of shares of ABCD(ticker) Corporation that is in the IPO process. It is operating in an industry with the average Price/Earnings Ratio of 20. She calculates that the average Market Value-to-Book Value ratio of companies operating in this industry is 4.0. She collects the following information from the financial statements of ABCD on December 31, 2020, all in million USD: Net Sales 500; Total Assets 200; Total Liabilities 50; Total Equity 150; Net Income 30.

Ashley estimates that the initial price for ABCD stocks is 30USD. The company wants to sell 100 percent of their equity and they have 10 million shares outstanding. Comment on the initial price. Given the above information, determine whether the initial price will be attractive to the investors. Is there any overpricing or underpricing?