Q.1 (35 Points)Your company produced the following reported year-to-date (YTD) income statements during 2014-2015 period. You have recently completed a comparable company analysis and figured out that the applicable, average Mcap/LTM Net Income multiple for your company is 7.5x. Based on your comparable company analysis, what should be the average stock price per share if you plan to sell your company? (Show your work!)

Reported YTD Income Statement 2014:Q3 2014:Q4 2015:Q3

Sales 3,500 4100 3600 COGS 2,200 2925 3000

Other Income

SG&A

Restructuring ChargeEBIT

Interest Expense Pre-tax Income Income Tax (38%)Net Income

Additional Notes:

50 90 0 675 700 120 0 20 0

675 545 480

75 102 73

600 443 407 228 168.34 154.66

372 275 252

• In 2015:Q2, your company recorded a $100 mil. pre-tax inventory write-off due to fire inthe company's warehouse.
• In 2014:Q3, your company realized a $50 mil. pre-tax gain ("other income") on the saleof a non-core business.
• In 2014:Q4, your company additionally realized a $40 mil. pre-tax gain ("other income")on the sale of a non-core business.
• In 2014:Q4, your company recognized a $20 mil. pre-tax restructuring costs in connection with a downsizing strategy.
• Your company has 125 mil. basic outstanding shares, with current stock price of $45 per share. The company has the following information about the options/warrants:

Options/warrants Tranche

Tranche 1

Tranche 2

Tranche 3 Tranche 4 Tranche 5 Tranche 6

Number of Shares (mil.)

10.00 7.50 5.00 2.50 1.00 0.50

Exercise Price

$ 5.00 $ 25.00 $ 30.00 $ 35.00 $ 40.00 $ 55.00