Mn (Million) Comparables: Company A Company B Company C Price per share $ 11.50 Price per share $ 19.60 Price per share $ 16.50 Market value of preferred share $11.00 mn No preferred share Market value of preferred share $ 4.70 mn # of common shares 1.50 mn # of common shares 0.10 mn # of common shares 3.50 m Book value of debt $ 3.75 mn Book value of debt $ 5.45 mn Book value of debt $ 5.00 mm Cash and cash Eq $ 1.25 mn Cash and cash Eq $ 0.45 mn Cash and cash Eq $ 1.10 mn EBIT $ 1.15 mn EBITDA $ 0.75 mn EBIT $ 2.32 mn D&A $ 0.35 mn D&A $ 0.45 mn D&A $ 0.55 mn Interest expenses $ 0.25 mn Interest expenses $ 0.25 mn Interest expenses $ 0.12 mn Tax rate 41% Tax rate 43% Tax rate 38% Target company "T" Forward EPS $ 0.59 EBITDA $ 2.78 mn Market value of preferred share $ 0.85 mn # of common shares 1.85 mn Book value of debt $ 2.45 mn Cash and cash Eq $ 0.75 mn Tax rate 40% a) You are asked to value company T using the Multiple comparable) approach. You are given company, A, B, and C as comparables. Calculate the price per share of T using EV/EBITDA multiple. Use simple average of comparables and use all the companies (do not ignore outliers). Calculate the price per share of T using P/E multiple. Use simple average of comparables and use all the companies (do not ignore outliers). 10 marks b) 10 marks Mn (Million) Comparables: Company A Company B Company C Price per share $ 11.50 Price per share $ 19.60 Price per share $ 16.50 Market value of preferred share $11.00 mn No preferred share Market value of preferred share $ 4.70 mn # of common shares 1.50 mn # of common shares 0.10 mn # of common shares 3.50 m Book value of debt $ 3.75 mn Book value of debt $ 5.45 mn Book value of debt $ 5.00 mm Cash and cash Eq $ 1.25 mn Cash and cash Eq $ 0.45 mn Cash and cash Eq $ 1.10 mn EBIT $ 1.15 mn EBITDA $ 0.75 mn EBIT $ 2.32 mn D&A $ 0.35 mn D&A $ 0.45 mn D&A $ 0.55 mn Interest expenses $ 0.25 mn Interest expenses $ 0.25 mn Interest expenses $ 0.12 mn Tax rate 41% Tax rate 43% Tax rate 38% Target company "T" Forward EPS $ 0.59 EBITDA $ 2.78 mn Market value of preferred share $ 0.85 mn # of common shares 1.85 mn Book value of debt $ 2.45 mn Cash and cash Eq $ 0.75 mn Tax rate 40% a) You are asked to value company T using the Multiple comparable) approach. You are given company, A, B, and C as comparables. Calculate the price per share of T using EV/EBITDA multiple. Use simple average of comparables and use all the companies (do not ignore outliers). Calculate the price per share of T using P/E multiple. Use simple average of comparables and use all the companies (do not ignore outliers). 10 marks b) 10 marks
