Question
You expect mynga, a publicly trading gaming company to generate $450 million in revenues, $30 million in after-tax operating income and return on capital
You expect mynga, a publicly trading gaming company to generate $450 million in revenues, $30 million in after-tax operating income and return on capital (post tax) of 14% next year. Through your research you have come to know the following for a typical gaming company; is in stable growth phase with a growth rate of 2.1% forever After tax operating margin (ATOM) is 60% of Mynga Sales to capital ratio is 2 times of Mynga Median EV/Sales is 0.6 all the companies are fairly valued share the same cost of capital and growth rates with Mynga Estimate the EV/Sales ratio for Mynga
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