In March 2023, restaurant chain Wendy's had a stock price of $21.40 with 213 million shares outstanding. In addition, Wendy's held $750 million in cash, and had $3.45 billion in debt. Finally, Wendy's had sales of $2.1 billion and EBIT of $336 million over the preceding 12 months.

What was Wendy's Enterprise Value (the value of its business) at that time? What was Wendy's EV/Sales and EV/EBIT multiple?

In March 2023, the median Enterprise Value/Sales multiple for Wendy's peers was 3.7x. If you believe Wendy's should have the same EV/Sales multiple as the peer median, what share price would you estimate for Wendy's?

Answer rating: 100% (QA)

First lets calculate Wendys Enterprise Value Enterprise Value is calculated as Market Capitalization ... View the full answer