Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Company B, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Company B had revenues of $40 Millions

Company B, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Company B had revenues of $40 Millions of USDs and earnings of $15 of Millions of USDs. Company B has filed a registration statement with the SEC for its IPO. If the industry average Price/Earnings ratio and Price/Revenues ratio for the recent fiscal year were 10 and 0.9 respectively. Estimate the IPO price for Company B using the Price/Revenues ratio and assuming that they will issue 22 Million shares."

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_step_2

Step: 3

blur-text-image_step3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Finance questions

Question

Are dividends an expense? Sometimes? Always? Never? Explain.

Answered: 1 week ago