Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Financial information for Dell and Apple (as of 12/31/2019) Dell Apple Market Price 167.77 230.09 Price/sales 1.36 4.01 Trailing P/E 16.3 19.54 Forward P/E 15.01

Financial information for Dell and Apple (as of 12/31/2019)
Dell Apple
Market Price 167.77 230.09
Price/sales 1.36 4.01
Trailing P/E 16.3 19.54
Forward P/E 15.01 18.06
Enterprise value 94.99 billion 1.04 trillion
Return on assets (ROA) 3.75% 11.99%
Current ratio 2.02 1.5
Payout ratio 28.86% 25.13%
Diluted EPS 10.38 11.78
Earnings before interest, taxes, and depreciation (EBITDA) 6.15 billion 76.54 billion

Use the information above and the market multiples method of valuation to calculate the intrinsic value of Dell based on the growth prospects of Apple, proxied for by using the trailing P/E ratio.

Group of answer choices

A. $213.85/share

B. $142.18/share

C. $202.74/share

D. $94.99/share

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: 3

blur-text-image

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

The Handbook Of Financial Modeling

Authors: Jack Avon

2nd Edition

1484265394, 978-1484265390

More Books

Students also viewed these Finance questions