Question
So I have all the equations and answers for this problem except for the Average method. I am confused because I research it online and
So I have all the equations and answers for this problem except for the Average method. I am confused because I research it online and the "average method" itself does not pop up. There are types of average methods, but not straight up an average method.
Complete the following corporate valuation methods (five) based on the following data:
Input Data
Shareholders' Equity (SE) $1,500,000
Net Income (NI) $850,000
Stock Price (SP) $50
EPS $4
No. of outstanding shares $300,000,000
Goodwill $100,000
Intangibles $75,000
Total Assets $3,000,000
Net Worth Method
Net Worth = TA- Liability = 3,000,000-1,5000,000=$15,000,000
Net Income Method- Given in the data = $850,000
Price/Earnings Ratio Method= SP/EPS= 12.5
Outstanding Shares Method = 3,000,000
Average Method ?????????
2. Determine, recommend and defend the best corporate evaluation method. Identify any concerns that you have about these methods
3. As a future decision maker concerned about either selling or purchasing companies, explain why is it important to have a reasonable knowledge of what the firm is worth.Besides these methods, what else could a decision maker do to obtain other data points on corporate worth on assets?
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