Google, Inc., of Mountain View, California, operates the most popular and powerful search engine on the Web. The company went public using an unconventional Dutch auction method on August 19, 2004. The resulting IPO was the largest Internet IPO ever, raising $1.67 billion and leaving the firm with 271,219,643 shares of common stock. You are trying value the shares in an effort to price the IPO. (Mentally transport yourself back to August-04.) While Google commands a wide lead over its competitors in the search engine market, it is witnessing an increased pressure from well-funded rival entities. Yahoo! Inc., with a market cap of approximately $38.43 billion, is generally regarded as following a business model very similar to Google's. 1. Using both PE ratio and Enterprise Value to EBIDTA ratio, at what price should the stock be offered? Use the data in the following table for the set of comparable companies in your analysis. Assume Google's forecasted EBIDTA is approximately $800 million, cash and equivalents are $430 million, and interest bearing debt (total short-term and long-term) equals $10 million. Also, Google's net income is expected to be $260 million. The price using PE ratio is and the price using Enterprise Value to EBIDTA ratio is Enter the answer in $s upto two decimal places. Financial Information Earthlink (ELINK) Yahoo (YHOO) eBay (EBAY) Microsoft (MSFT) 2003 Shares Outstanding 159399000 655602000 646819000 10800000000 2003 Fiscal close stock price 10 45.03 64.61 25.64 Market Capitalization ($ million) 1593.99 29521.76 41790.98 276912 Short-term debt 900000 0 2800000 0 Long-term debt ($ million) 0 750 124.5 0 Cash & Equivalents ($ million) 249.74 713.54 1381.51 6438.0 Short-terms investments ($ million) 89.1 595.98 340.58 42610 EBITDA ($ million) 218.1 455.3 818.2 14656 Net Income ($ million) (62.2) 237.9 441.8 9993 Calculated EPS (-39) 36 .68 93