Question
New Line technologies Ltd. is planning to acquire Frontline Technologies Ltd. as part of its expansion strategy. To arrive at a reasonable estimate of valuation
- New Line technologies Ltd. is planning to acquire Frontline Technologies Ltd. as part of its expansion strategy. To arrive at a reasonable estimate of valuation of the target firm, it is planning to use the comparable companys financial data. The Following financial information is presented for a competitor, Block Chain Technologies, Inc. [5]
Financial Year 2019 All values are in INR millions except per share data |
|
|
Sales |
| 235 |
EBIT |
| 65 |
Net Income |
| 51 |
Basic Shares Outstanding |
| 5.5 |
EBITDA |
| 76 |
Market Price per share (INR) |
| 135 |
Total Assets |
| 322 |
Long-Term Debt |
| 70 |
Share Holders' Equity |
| 145 |
Liabilities & Shareholders' Equity |
| 322 |
Net Operating Cash Flow |
| 73 |
Required: Derive the valuation estimate per share of equity for New Line Technologies if it is reporting the following financials:
Revenue: INR 100 million; EBIDTA: INR 40 million; Net Income: INR 28 million;
Book Value: INR 100 million; Basic Share outstanding: 15 million.
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