Explore BrainMass
Share

Explore BrainMass

    Value of equity - Relative valuation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See attached.

    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

    © BrainMass Inc. brainmass.com October 10, 2019, 2:29 am ad1c9bdddf
    https://brainmass.com/business/flow-to-equity/value-equity-relative-valuation-379522

    Attachments

    Solution Preview

    Answer:

    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

    $2.19