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Question 9 (Comparables valuation). You are given the information below about company X and two comparable companies. Your goal is to conduct a val- uation
Question 9 (Comparables valuation). You are given the information below about company X and two comparable companies. Your goal is to conduct a val- uation of company X's stock price. Please note that stock price and EPS are per share amounts, while debt, cash, and sales are for the entire company. Company Debt Cash Sales Company X Comparable 1 Comparable 2 Shares outstanding 10 100 50 Stock price EPS /share $1 $10 $1 $50 $2.5 $50 $1,000 $500 $0 $0 $0 $100 $1,000 $1,000 1. Perform a comparables valuation using the average P/E ratio of comparables. What should company X's stock price be? 2. Perform a comparables valuation using the average EV/Sales ratio of compa- rables. What should company X's stock price be
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