Question
You have been approached by the president of your company asking for assistance in completing a comparables based valuation of a private company targeted for
You have been approached by the president of your company asking for assistance in completing a comparables based valuation of a private company targeted for acquisition. She has provided you with the comparable data below and has assured you that each comparable firm has been carefully chosen and is a good match. Assuming that the target company has EBIT of $145 and debt of $700, what is a reasonable estimate of the value of the target company's equity? (4 points)
| MV | MV | |||
| EBIT | Debt | Equity | ||
| Nordstrom | 255 | 1519 | 1658 | |
| Kmart | 452 | 758 | 7329 | |
| JC Penny | 175 | 212 | 2417 | |
| Sears | 922 | 3831 | 11226 | |
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
