Suppose you plan to use multiples to estimate the stock price of Electronic Arts (EA). You...
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Suppose you plan to use multiples to estimate the stock price of Electronic Arts (EA). You observed the following quantities from a list of comparable companies in the same industry P/E Take Two Interactive 21.9x EV/EBITDA 9.6x Activision Blizzard 14.7x 9.0x Konami 21.7x 9.8× 21.3x 3.1 x Ubisoft Entertainment where in the table P/E is the price-earning ratio, EV is enterprise value, and EBITDA represents earnings before interest, tax, depreciation and amortization. (a) Suppose EA currently has an EPS (Earnings per Share) of $2.64/share, what is your estimation of EA's stock price? (b) Suppose EA currently has an EBITDA of $260M, what is your estimation of EA's enterprise value? Suppose you plan to use multiples to estimate the stock price of Electronic Arts (EA). You observed the following quantities from a list of comparable companies in the same industry P/E Take Two Interactive 21.9x EV/EBITDA 9.6x Activision Blizzard 14.7x 9.0x Konami 21.7x 9.8× 21.3x 3.1 x Ubisoft Entertainment where in the table P/E is the price-earning ratio, EV is enterprise value, and EBITDA represents earnings before interest, tax, depreciation and amortization. (a) Suppose EA currently has an EPS (Earnings per Share) of $2.64/share, what is your estimation of EA's stock price? (b) Suppose EA currently has an EBITDA of $260M, what is your estimation of EA's enterprise value?
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a First we need to determine EAs PE ratio based on the multiples provided Since Ubisoft Ente... View the full answer
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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