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Zeta Group Holdings (Zeta) has three divisions. You have been asked to use valuation multiples of comparable companies to value Zeta. You have collected the

Zeta Group Holdings (Zeta) has three divisions. You have been asked to use valuation multiples of comparable companies to value Zeta. You have collected the following information on Zetas performance in each division for the most recent year.

Division

Sales

EBITDA

Pharmaceuticals

$ 1 billion

$ 300 million

Cosmetics

$ 400 million

$ 100 million

Medical Devices

$ 2 billion

$ 400 million

Zeta currently has $2 billion in debt outstanding and a cash balance of $300 million. There are 1,000 million shares outstanding.

You find comparable firms for each division and estimate the median values for different multiples for each division:

Division

Multiple

Median value

Pharmaceuticals

Enterprise Value/Sales

3 x

Cosmetics

Enterprise Value /EBITDA

1.5 x

Medical Devices

Enterprise Value /EBITDA

5 x

Please use the information collected to complete the valuation for each share in Zeta.

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