Question
The following table provides summary data for Cerner Corporation (CERN) and its competitors, Allscripts Healthcare Solutions Inc. (MDRX) and McKesson Corporation (MCK). (in millions) CERN
The following table provides summary data for Cerner Corporation (CERN) and its competitors, Allscripts Healthcare Solutions Inc. (MDRX) and McKesson Corporation (MCK).
(in millions) | CERN | MDRX | MCK |
---|---|---|---|
Company assumed value | -- | $2,063 | $21,063 |
Equity assumed value | -- | $1,607 | $19,962 |
Net operating assets | $4,296 | $2,007 | $ 9,195 |
Book value of equity | $4,928 | $1,551 | $ 8,094 |
Net nonoperating obligations (assets) | $(632) | $456 | $ 1,101 |
Common shares outstanding | 318.4 shares | 166.7 shares | 184.9 shares |
(a) Compute the PB ratio for both Allscripts Healthcare and McKesson. (Round your answers to two decimal places.)
MDRX Answer
MCK Answer
(b) Use Allscripts Healthcare and McKesson as comparables, along with the PB ratios from part a, and then estimate for Cerner its equity intrinsic value and its equity intrinsic value per share. (Round the equity intrinsic value to the nearest million and the value per share to the nearest cent.)
Average of the two rounded ratios in (a) above
Answer (Round to two decimal places.)
Using the rounded average calculated above, calculate the following:
Equity intrinsic value $Answer million
Equity intrinsic value per share $Answer
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