
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Question
M3

Transcribed Image Text:You are assigned to determine a fair value for
AdvBioTech (ABT) Corporation. You determined
that market multiples approach would be the best
method to determine a fair value for this company.
The total asset value of the company is 600 million
dollars and the liability is 400 million dollars. The
company has 25 million shares outstanding. ABT
also generated 400-million-dollar-revenue in the
current year. In a typical year, company's return on
equity is 16 percent. You gathered the following
three multiples from a close competitor of ABT. The
P/E (Price-Earnings) ratio is 48, Price to sales (P/S)
is 4, and price to book (P/B) ratio is 6. Based on
information given about ABT and its competitor,
determine the value of ABT using market multiples
approach. Based on your analysis, what is the fair
value of ABT using P/S multiple?
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps

Knowledge Booster
Similar questions
- What is the difference between a Form 10–K and a Form 10–Q?arrow_forwardI asked for S5-6arrow_forward102. Four capacitors C1-1uF, C2=2uF, C3=3uF and C4-4uF are connected as given in figure. The potential of junction O is A. 16.5 V B. 18 V C. 15.5 V D. 18.5 V 10 V 5V C₁ # H C3+ CA 20 V 30 Varrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
- Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage LearningCorporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education

Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,



Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,

Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education