Smith and Sons (SNS), Inc. is a private company that manufactures non-branded consumer products and it is
Question:
Smith and Sons (SNS), Inc. is a private company that manufactures non-branded consumer products and it is considering an IPO. During the most recent fiscal year, SNS had Revenues of $400 Million and Earnings of $25 Million. Before the stock is offered, SNS’s Investment Bankers have assembled the following information based on data for other companies in the same industry that have recently gone public:
Bay Products Corp: Price-Earnings = 16.20x and Price-Revenues = 1.10x
Frasier-Byrce Inc.: Price-Earnings = 17.70x and Price-Revenues = 1.20x
Fashion Industries Group: Price-Earnings = 19.10x and Price-Revenues = 1.40x
We-Creation International: Price-Earnings = 15.00x and Price-Revenues = 0.80x
Using the Industry Average Price-to-Earnings multiple, what is the Estimated Total Value of Smith and Sons (SNS)?
$320 Million
$375 Million
$425 Million
$450 Million
Using the Industry Average Price-to-Earnings multiple and assuming there are 10 Million shares outstanding, what is the Estimated Value per Share of Smith and Sons (SNS)?
$32.00
$37.50
$42.50
$45.00
Using the Industry Average Price-to-Revenues multiple, what is the Estimated Total Value of Smith and Sons (SNS)?
$320 Million
$375 Million
$425 Million
$450 Million
Using the Industry Average Price-to-Revenues multiple and assuming there are 10 Million shares outstanding, what is the Estimated Value per Share of Smith and Sons (SNS)?
$32.00
$37.50
$42.50
$45.00
Entrepreneurial Finance
ISBN: 978-1305968356
6th edition
Authors: J. Chris Leach, Ronald W. Melicher