Part 3 - Understanding the valuation 3.1. What is the 12-month-ahead share price predicted by the analysts? 3.2. How was this prediction made? More precisely, which ratio was used? What multiple was used this multiple compare to that of 2001? What does it imply for the assumptions made by regarding the future growth of the company? 3.3. Had the authors made the valuation using P/E ratios, assuming a 2002 P/E ratio equal to the 20 what would the estimated 2002 share price have been? 3.4. Check that in 2000, the company's debt to (book) equity ratio was 1.58. Assume that the comp had had much less leverage, financing its operations with 50% less debt and making up the d issuing more shares. This would imply a new debt-to-equity ratio of 0.44. How many shares we outstanding? How would P/E and EV/EBITDA multiples be impacted? What does it imply for th of these multiples