Question: Calculate Teuer's multiples. Given the value of Teuer derived using DCF (for the Teuer (A) case), calculate the sales, net income, and cash flow from

  • Calculate Teuer's multiples. Given the value of Teuer derived using DCF (for the Teuer (A) case), calculate the sales, net income, and cash flow from assets multiples for Teuer at the end of 2012. Why do the three ratios differ from each other? Calculate the three multiples at the end of 2018. If they are expected to change between 2012 and 2018, explain why. Consider what each ratio is measuring and thus what assumptions you are making about comparability when you use each ratio.
  • Comparable firms. When you value a firm using a multiples approach, you only use firms that are comparable to Teuer (the target firm). On what dimensions should the firms be comparable to the target firm? Each of the nine possible firms is in the same industry as Teuer. Based on the information in the case, pick a set of firms that you consider to be comparable to Teuer in the important dimensions. You will need to be explicit about which dimensions are important.
  • Value Teuer using a multiples approach. Based on the set of firms that you consider comparable, calculate the relevant multiple and value Teuer (price per share). If your multiples valuation differs from your DCF valuation, explain why.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

Bill and Fiona Russell have always enjoyed craft beer, and in recent years have started making small batches at home. As they experimented, they mastered several niche recipes including a key lime...

Q:

**Accounting for Revenue Recognition in the Software Industry:** Revenue recognition in the software industry is guided by specific principles to accurately reflect the economic substance of...

Q:

Hi all, I need help with an assignment; i have attached it with this mail. I have also attached an excel file here which is the solver.It has to be answered on the excel solver orspreadsheet....

Q:

Comparable firms method i. We assume that competitors are fairly valued. ii. We find their values as multiples of some indicator (e.g., they trade at 10x earnings). iii. We apply that multiple to our...

Q:

Develop a pro forma income statement and balance sheet for the years 2016, 2017, and 2018. Assumptions should be based on historical data continue and Using either a DCF valuation, multiple...

Q:

1. What is your interpretation of the investor reaction to the announcement that Berkshire Hathaway (BRK) would purchase Precision Castparts Corporation (PCP) for a total cost of $37.2 billion?...

Q:

Suppose there is a 10 percent chance that the Argentinian government will nationalize the project before the first year's cash flows arrive, and a 10 percent chance it will do so every year after...

Q:

Assuming a tax rate of 35%, what is the WACC the ADR holder should use to discount Pecom's cash flows? Assume the discount rate is what you calculated now. Project Pecom's free cash flows using...

Q:

How much should Petrobras be willing to pay for Pecom's equity? Feel free to make adjustments and use any other methods of valuation to support your answer. Case: Drilling South: Petrobras Evaluates...

Q:

How should Petrobras deal with existing Pecom debt holders if it intends to buy the firm? Case: Drilling South: Petrobras Evaluates Pecom Joo Nogueira Batista, Chief Financial Officer of the...

Q:

If variable manufacturing overhead is applied to production on the basis of direct labor-hours and the direct labor efficiency variance is unfavorable, will the variable overhead efficiency variance...

Q:

Do older college students tend to weigh more than younger college students? Our data are ages and weights for a random sample of 76 college students. A scatterplot (not shown here) shows that the...

Q:

Find the general indefinite integral. ( R e m e m b e r the constant o f integration. ) ( 8 x 2 + 2 + 6 x 2 + 1 ) d x

Q:

Below are shown three different crystallographic planes for a unit cell of some hypothetical metal. The circles represent atoms: (a) To what crystal system does the unit cell belong? (b) What would...

Q:

The accounts in the ledger of Dive Co. as of July 31, 2012, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally...

Q:

Suppose one of your clients is four years away from retirement and has only $1,500 in pretax income to devote to either a Roth or a traditional IRA. The traditional IRA permits investors to...

Q:

Paco's saving account earns 13% compounded weekly and receives quarterly deposits of $38,000.His first deposit occurred on October 1, 1996, and the last deposit is scheduled for April 1, 2012....

Q:

Strawberries contain about 15 wt% solids and 85 wt% water. To make strawberry jam, crushed strawberries and sugar are mixed in a 45:55 mass ratio, and the mixture is heated to evaporate water until...

Q:

Design a minimum-mass symmetric three-bar truss (the area of member 1 and that of member 3 are the same) to support a load P, as was shown in Fig. 2.9. The following notation may be used: Pu = P cos...

Q:

=+s(, +)+m) for AESP and BE btn; the c+, can be suppressed if the initial probabilities are the stationary ones. Show that this holds for A and B 76. Show that C 7 implies that P(C) is either 0 or...

Q:

=+8.35. A zero-one law. Let the state space S contain s points, and suppose that ,, = sup; | pf) - m,1 - 0, as holds under the hypotheses of Theorem 8.9. For a b, let " be the o-field generated by...

Q:

=+8.19. A thinker who owns r umbrellas wanders back and forth between home and office, taking along an umbrella (if there is one at hand) in rain (probability p) but not in shine (probability q). Let...