The following table provides summary information for Alpha Corp. and its competitors Beta, Inc. and Gamma...

 

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The following table provides summary information for Alpha Corp. and its competitors Beta, Inc. and Gamma Company. Use the information to compute the price to net operating assets ratio for Beta and Gamma. In addition, using Beta and Gamma as comparables, compute Alpha's intrinsic value, equity intrinsic value and equity intrinsic value per share. (All amounts in millions) Company assumed value Equity assumed value Net operating assets Book value of equity Net nonoperating obligations Alpha $3,766 2,922 844 Common shares outstanding 92.4 Beta $47,252 42,865 11,164 6,777 4,387 325.8 Gamma $35,368 35,024 5,719 344 5.375 185.4 The following table provides summary information for Alpha Corp. and its competitors Beta, Inc. and Gamma Company. Use the information to compute the price to net operating assets ratio for Beta and Gamma. In addition, using Beta and Gamma as comparables, compute Alpha's intrinsic value, equity intrinsic value and equity intrinsic value per share. (All amounts in millions) Company assumed value Equity assumed value Net operating assets Book value of equity Net nonoperating obligations Alpha $3,766 2,922 844 Common shares outstanding 92.4 Beta $47,252 42,865 11,164 6,777 4,387 325.8 Gamma $35,368 35,024 5,719 344 5.375 185.4

Answer rating: 100% (QA)

Solution ACalculation of price to net operating assets ratio Price to net oper... View the full answer