Question
Madison Makeup reported the following on its most recent financial statements (in $ millions, except EPS). Miscellaneous financial information Miscellaneous financial information Current portion of
Madison Makeup reported the following on its most recent financial statements (in $ millions, except EPS).
Miscellaneous financial information | Miscellaneous financial information |
Current portion of long-term debt: $6,05 | Note: average peer EV/EBITDA: 17.18 |
EBITDA : $20,844 | Note: the effective tax rate: 21.21% |
Earnings per share: $3.57 | Note: median peer EV/EBITDA: 19.32 |
EBIT: $7,693 | Long-term debt: $43,889 |
Note: median peer EV/EBIT: 21.63 | Note: number of shares (in millions): 2,695 |
Goodwill: $6,589 | Note: average peer EV/EBIT: 24.89 |
Total Liabilities: $91,296 | Note: average peer P/E: 20.54 |
Total assets: $117,042 | Note: median peer P/E: 23.26 |
Note: average peer P/B: 9.76 | Note: median peer P/B: 10.25 |
Short-term debt: $20,780 | Cash: $8,655 |
QUESTION SOLVE:
i.) What is the share price of Madison Makeup if the relevant peer multiple is the average EV/EBITDA for its peers? | |
ii.) What is the share price of Madison Makeup if the relevant peer multiple is the median P/B for its peers? | |
iii.)What is the share price of Madison Makeup if the firm is considered better managed than its peers and the appropriate pricing multiple for the firm is the average EV/EBIT for the peer group, adjusted by 0.56 in the relevant direction. | |
iv.) What is the share price of Madison Makeup if the firm is considered slower growing than its peers and the appropriate pricing multiple for the firm is the median P/E for the peer group, adjusted by 1.11 in the relevant direction. | |
v.) What is the share price of Madison Makeup if the firm is considered more risky than its peers and the appropriate pricing multiple for the firm is the average P/B for the peer group, adjusted by 2.18 in the relevant direction. |
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