Purchase Solution

Estimate the value of a privately-held firm based on the following information

Not what you're looking for?

Ask Custom Question

1. Estimate the value of a privately-held firm based on the following information: total market value (or capitalization value) of a comparable firm = $200,000; net income of a comparable firm = $40,000; number of shares outstanding of the comparable firm = 20,000; net income for the target firm - $15,000; number of shares outstanding for the target firm = 10,000

2. Based on the following information, estimate the percentage appreciation on stock bought by the venture investors: founders' purchase price $.50; venture investors' purchase price $2.00; current stock price = $10.00; founders holding period = 5 years; venture investors holding period = 3 years

Purchase this Solution

Solution Summary

The solution estimates the value of a privately-held firm based on the following information.

Solution Preview

For the comparable firm, the market cap is 5x its net income (200k/40k). If the target is valued at the same multiple, it ...

Purchase this Solution


Free BrainMass Quizzes
Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Operations Management

This quiz tests a student's knowledge about Operations Management

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.