Homework helpDid I do this analysis correctly, per the question below? Its asking to Calculate a fair value of PCP based on the comparative multiple approach. Reference Exhibit 11, Compare the enterprise value of PCP as a multiple of Revenue, EBITDA and EBIT and the Market Value (MV) of Equity as a multiple of net income and book value. What is your estimate of the fair value of PCP based on these multiples? (Follow the sample calculation in the footnote to Exhibit 11. You may want to take an average of the implied fair values from the multiples).

Calculations from Exhibit 11 of Precision Castparts Corp. (PCP) Compared to multiples of various firms

Company	MV	Enterprise	Book		CY 14			Enterprise Value as Multiple of:				MV of Equity as Multiple of:
Name	Equity	Value	Value	Rev	EBITDA	EBIT	Net Income		Revenue	EBITDA	EBIT		Net Income	Book Value
Alcoa	$13,637	$23,164	$10,599	$23,906	$3,556	$2,185	$2,043		0.97x	6.51x	10.60x		6.68x	1.29x
LISI	$1,332	$1,517	$709	$1,307	$193	$131	$81		1.16x	7.86x	11.56x		16.36x	1.88x
ThyssenKrupp	$9,460	$12,924	$3,182	$41,304	$2,290	$1,314	$210		0.31x	5.64x	9.84x		45.05x	2.97x
Allegheny Technologies	$1,804	$3,193	$2,598	$4,223	$283	$106	($3)		0.76x	11.28x	30.09x		NM	0.69x
Carpenter Technology	$1,627	$2,220	$1,326	$2,173	$382	$212	$133		1.02x	5.81x	10.47x		12.25x	1.23x
Median	$1,804	$3,193	$2,598	$4,223	$382	$212	$133		0.97x	6.51x	10.60x		14.31x	1.29x
Mean	$5,572	$8,603	$3,683	$14,583	$1,341	$790	$493		0.84x	7.42x	14.51x		20.08x	1.61x
Precision Castparts			$10,929	$10,005	$2,927	$2,602	$1,530
Implied Value - Median1									$9,705	$19,055	$27,581		$21,894	$14,098
Implied Value - Mean1									$8,404	$21,718	$37,755		$30,722	$17,596
The calculation of the implied values for PCP based on the median of the peer firms multiples takes the product of the median value of the multiples of comparable firms (line 8) and multiplies it times the relevant base (revenue, EBITDA, EBIT, net income, or book value) for PCP. The same method is used for the calculation of the implied value based on the average or mean of the peer firms multiples (line 9). For instance, the implied value based on the median multiple of EBIT ($37,755 million) is derived by multiplying 14.51 (the mean EBIT multiple for the comparable firms) times $2,602 million (the EBIT of PCP).

Calculations from Exhibit 11 of Precision Castparts Corp. (PCP) Compared to multiples of various firms (these are my calculations based on the question above)

Precision Cast Parts	Revenue	EBITDA	EBIT	Net Income	Book Value
Implied Value (Median)	$37.2/4,223= $88.09	$37.2/382= $97.38	$37.2/212= $17.55	$37.2/133= $27.97	$37.2/$2,598= $14.32
Implied Value (Mean)	$37.2/14,583= $25.509	$37.2/1,341= $27.74	$37.2/790= $47.09	$37.2/493= $75.46	$37.2/$3,683= $10.10