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Suppose an analyst has gathered the following information on the target company, the TORNADO Company: TORNADO Company (in millions) Average of Multiples of Comparables Earnings

 Suppose an analyst has gathered the following information on the target company, the TORNADO Company:

TORNADO Company (in millions)


Average of Multiples of



Comparables

Earnings

$ 16.50


P/E of comparables

15.6

Cash flow

$ 21.20


P/CF of comparables

20.3

Book value of equity

$ 41.30


P/BV of comparables

5.8

Sales

$ 98.10


P/S of comparables

4.1

Number of shares outstanding: 750 000

Value of the TORNADO’s shares (per share), giving the cash flow multiple and P/S multiple 40% and the other methods 10% each.

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