Question
c) Assume that you are trying to estimate a price per share on an initial public offering (IPO) of a company involved in real estate.
c) Assume that you are trying to estimate a price per share on an initial public offering (IPO) of a company involved in real estate.
The company recorded the following indicated earnings per share (EPS) in the last five years
| YEAR | EPS |
| 1 | 10 |
| 2 | 8 |
| 3 | 15 |
| 4 | 16 |
| 5 | 20 |
You also have data on other similar companies in the real estate sector which are already listed at the local stock exchange
| Comparable Firm | Market Price Per share (MPS) | Earnings Per Share (EPS) |
| A | 15 | 10 |
| B | 100 | 60 |
| C | 50 | 60 |
| D | 30 | 25 |
Extracts from the books of the company reveal the following
| Ordinary Share Capital (Sh. 1.5 Par value) | Sh. 300 Million |
| Borrowings | Sh. 75 Million |
Required:
Estimate the price per share for the company. Clearly state the assumptions taken into consideration in your analysis and computation
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The Venture Capital Deformation Value Destruction Throughout The Investment Process
Authors: Darek Klonowski
1st Edition
3319703226,3319703234
