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Problem 2 - estimating the value of the company with the multiples method The following information from US companies in the alcoholic beverage industry is
Problem estimating the value of the company with the multiples method
The following information from US companies in the alcoholic beverage industry is available.
a HNC is listed on the NYSE and belongs to the alcoholic beverage industry. Determine
whether the share is undervaluated or overvaluated according to the PE multiple and to
the PEG multiple.
CC Speeddrinks Ltd is a private company, active in the same industry. The trailing Net Earnings
for CC Speeddrinks are $ million and these are expected to grow with per year in the next
five years note: the growth rates in the table are also annual growth rates for the next five years
Determine for CC Speeddrinks the value of the equity when using:
b the PE multiple
c the PEG multiple
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