Question
The goal is to compute a price for Tesla, Inc. Some information about Tesla. The market price of Tesla is $655. Shares outstanding 959.85 million.
The goal is to compute a price for Tesla, Inc. Some information about Tesla. The market price of Tesla is $655. Shares outstanding 959.85 million. Market cap is $628.7 billion. Predicted earnings per share (EPS) = 5.52 Predicted sales are 62.73 billion. Given the number of shares, the predicted sales per share = 65.35 Predicted book value per share = 23.15 This table shows information for the market cap and multiples of other firms in the industry:
Market cap | Predicted Price to Earnings | Predicted Price to Book (P/B) | Predicted Price to sales (P/S) | |
Tesla | 628.7 | 160 | 21 | 13 |
GM | 8.66 | 11.4 | 1.92 | 0.71 |
Volkswagen | 75.1 | 4.74 | 1.08 | 0.9 |
Median |
Question: Question: What is the average value of Tesla using P/E multiples?
Note: You need to : 1. Compute the medians of the multiples in the table
2. Use these medians to compute the prices, so you will have 3 different prices, one for each multiple.
3. Take the average of these 3 prices. This is the answer.
Multiple Choice
a.$50.5
b.$47.2
c.$49.9
d.$55.4
e.$65.2
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started