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You are interested in a relative valuation of company D. A. Based on the information below, compute P/E,P/BV,EV/EBITDA,EV/Sales ratio for A,B,C,D and industry average ratios
You are interested in a relative valuation of company D. A. Based on the information below, compute P/E,P/BV,EV/EBITDA,EV/Sales ratio for A,B,C,D and industry average ratios (remember to exclude company you're valuing from the average). What can you say about D's relative valuation ? B. Use the computed industry average P/E ratio from the part above to compute the implied price for company D, based on information that D's projected Net Income is $1 million and shares outstanding are still equal to 0.5 million. C. Assuming the companies have very different capital structures (leverage), which ratio(s) would be better? D. Why would EV/EBITDA be more informative than EV/Sales? You are interested in a relative valuation of company D. A. Based on the information below, compute P/E,P/BV,EV/EBITDA,EV/Sales ratio for A,B,C,D and industry average ratios (remember to exclude company you're valuing from the average). What can you say about D's relative valuation ? B. Use the computed industry average P/E ratio from the part above to compute the implied price for company D, based on information that D's projected Net Income is $1 million and shares outstanding are still equal to 0.5 million. C. Assuming the companies have very different capital structures (leverage), which ratio(s) would be better? D. Why would EV/EBITDA be more informative than EV/Sales
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