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Jorge Zaldvs, CFA, is researching the relative valuation of two companies in the aerospace/defense industry, NCI Heavy Industries (NCI) and Relay Group International (RGI) He

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Jorge Zaldvs, CFA, is researching the relative valuation of two companies in the aerospace/defense industry, NCI Heavy Industries (NCI) and Relay Group International (RGI) He has gathered relevant information on the companies in the following table EBITDA Comparisons (in Millions except Per-Share and Share-Count Data) Company RGI NCI 100 Price per share Shares outstanding Market value of debt Book value of debt 150 5 million2 million 50 52 100 112 Cash and investments Net income Net income from continuing operations Interest expense Depreciation and amortization Taxes 49.5 49.5 12 Using the infomation in the table, answer the following questions: 28. Calculate P/EBITDA for NCI and RGI 29. Calculate EV/EBITDA for NCI and RGI. 30. Which company should Zaldys recommend as relatively undervalued? Justify the selection

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