Imnot Shaw, an analyst working for Mr. Wonderful of shark-tank fame, is looking at a small publicly traded firm the Blacksuit Co. Other public firms in the same industry currently trade at a median P/E of 12.67. However, recent industry acquisitions have been at a median P/E of 15. Blacksuitsmost recent EPS was $1.76.

i) If Imnot used a comparable company valuation approach to estimate the value of Blacksuit as an ongoing (standalone) business, what would the estimated share price be?

ii) If Imnot used a comparable transaction valuation approach to estimate the value of Blacksuit, what would the estimated share price be?

iii) What explains the difference between the two value estimates?