You are an analyst at investment bank G S, and you are asked to evaluate the stocks of Surprise Corp The following table provides summary information for Surprise Corp and its two close competitors, Bellona, Inc and Suffolk Co Surprise Bellona Suffolk Market Value of Firm $876,369 $995,748 Market Value of Equity 512,324 913,198 NOPAT 683,741 150,587 422,515 Net income 508,043 108,807 341,022 Net Nonoperating Obligations (NNO) 195,407 364,045 82,550 of shares outstanding 8,778 5 446 3 635 2 Part A Using the average Value NOPAT multiples of the two peers, what is your estimated Surprise Corps stock price per share Part B Using the average Market Value of Equity Net Income multiples of the two competitors, what is your estimated Surprise Corps stock price per share Part C Do you think it is reasonable to use the average multiples of Bellona and Suffolk to evaluate Surprise Corp Briefly explain your answer (no calculation required)

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Posted on Oct 04, 2024

You are an analyst at investment bank G&S, and you are asked to evaluate the stocks of Surprise Corp. The following table provides summary information

You are an analyst at investment bank G&S, and you are asked to evaluate the stocks of Surprise Corp.

The following table provides summary information for Surprise Corp. and its two close competitors, Bellona, Inc. and Suffolk Co.

	Surprise	Bellona	Suffolk
Market Value of Firm		$876,369	$995,748
Market Value of Equity		512,324	913,198
NOPAT	683,741	150,587	422,515
Net income	508,043	108,807	341,022
Net Nonoperating Obligations (NNO)	195,407	364,045	82,550
# of shares outstanding	8,778.5	446.3	635.2

Part A. Using the average Value/NOPAT multiples of the two peers, what is your estimated Surprise Corps stock price per share?

Part B. Using the average Market Value of Equity /Net Income multiples of the two competitors, what is your estimated Surprise Corps stock price per share?

Part C. Do you think it is reasonable to use the average multiples of Bellona and Suffolk to evaluate Surprise Corp? Briefly explain your answer (no calculation required).