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    Value of equity - Relative valuation

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    What would be an indicated value of a company W based on the following information of comparable companies, A, B, and C.

    Company A Company B Company C
    Market / sales 1.6 1.4 1.1
    Market / book 1.7 1.9 2.0
    Market / Net income 23 18 20

    Market = market value of equity, Book = book value of equity
    Data for Company W:
    Sales = $200 million, Book value of equity = 70 million, Net income = $ 8 million

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    Company A Company B Company C Industry Average
    Market / sales 1.6 1.4 1.1 ...

    Solution Summary

    Shows how to calculate the value of equity of a company using comparable companies - multiples