Question: Example: Valuing an IPO Using Comparables Tiger, Inc., is a private company that designs, manufactures, and distributes branded consumer products. During the most recent fiscal

Example: Valuing an IPO Using Comparables Tiger, Inc., is a private company that designs, manufactures, and distributes branded consumer products. During the most recent fiscal year, the company had revenues of $325 million and earnings of $15 million. Tiger has filed a registration statement with the SEC for its IPO. Before the stock is offered, Tiger's investment bankers would like to estimate the value of the company using comparable companies. The investment bankers have assembled the following information based on data for other companies in the same industry that have recently gone public. In each case, the ratios are based on the IPO price. Price/Earnings Price/Revenues Company 1.2x Jones Corp. 18.8x 0.9x Switzer, Inc. 19.5x 0.8x Bloss Industries Group 24.1x 22.4x 0.7x Fox International After the IPO, Tiger will have 20 million shares outstanding. Estimate the IPO price for Tiger using the pricelearnings ratio and the price/revenues ratio

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