Question 242 pts

Ketema, Incorporated is a manufacturer of electronic instruments. Use the following information on Ketema and five other similar companies to value Ketema, Incorporated on December 31, 2021.

Ketema, Incorporated, 2021 ($ millions)
Net income	$ 66.10
Number of common shares (millions)	32.82
Earnings before interest and tax	$ 112.30
Tax rate	22%
Book value of equity	$ 335.10
Book value of interest-bearing debt	$ 470.80

Comparison of Ketema, Incorporated with Comparable Companies
	Ketema	Aloha Electric	Butler Electric	AJ Smith	Baker Modesto	National Power
Growth Rates, Financial Risks, Size
5-year growth rate in sales (%)	3.3	6.8	1.4	8.1	10.2	15.2
5-year growth rate in EPS (%)	5.1	1.3	9.2	(5.4)	19.6	3.4
Interest coverage ratio (X)	4.8	8.0	38.0	3.0	12.3	*
Total liabilities to assets (X)	0.7	0.6	0.4	0.7	0.5	0.1
Total assets ($ millions)	1,029	15,046	196	1,294	585	1,421
Indicators of Value
Price/earnings (X)		23.2	16.1	32.0	12.4	25.0
MV firm/EBIT(1Tax rate) (X)		23.3	16.2	34.7	13.2	25.0
MV equity/BV equity (X)		3.9	3.5	1.0	2.1	2.3
MV firm/BV firm (X)		2.7	3.3	1.0	1.8	2.3
Price/sales (X)		1.5	1.4	0.4	1.0	2.0
MV firm/sales (X)		1.9	1.4	0.8	1.1	2.0

*National Power has no interest-bearing debt outstanding.

MV = Market value; BV = Book value. MV firm is estimated as book value of interest-bearing debt + market value of equity.