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Equity Value can be estimated as Net Income times the PE Ratio. Enterprise Value is Equity Value plus Debt. Y Corp has Sales of $200M,
Equity Value can be estimated as Net Income times the PE Ratio. Enterprise Value is Equity Value plus Debt. Y Corp has Sales of $200M, EBITDA of $35M, Depreciation and Amortization of $10M, Debt of $90M, Net Income of $25M, A PE Ratio of 15.0, a Share Price of $35, and there are 5M Fully Diluted Shares, and $2.10 Fully EPS.
1. Using the PE Ratio, compute the Equity Value.
2. Using the just computed Equity Value, compute the Enterprise Value.
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