Question
Based on comparisons with peer companies, Harry Wilson finds the justified price multiples for Syllogistics Ltd. are a P/E ratio of 15, a P/CF ratio
Based on comparisons with peer companies, Harry Wilson finds the justified price multiples for Syllogistics Ltd. are a P/E ratio of 15, a P/CF ratio of 11, a P/S ratio of 3, and a P/B ratio of 2.0. Syllogistics earnings per share are $4.10, its cash flow per share is $5.00, its sales per share is $18.00, and its book value per share is 24.00. Harry will estimate the value per share with each multiplier, and then use a weighted average of these estimates where the P/E estimate is weighted 0.5, the P/CF estimate is weighted 0.2, the P/S estimate is weighted 0.2, and the P/B estimate is weighted 0.1. What is the final estimated price per share for Syllogistics?
A. | $60.65 | |
B. | $61.50 | |
C. | $57.35 | |
D. | $54.62 |
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