Question: F4 You are sssigned to determine a fair value for AdvBioTech (ABT) Corporation. You determined that market multiples approach would be the best method to

You are sssigned to determine a fair value for AdvBioTech (ABT) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The total asset value of the company is 420 million dollars and the liability is 120 million dollars. The company has 30 million shares outstanding. ABT also generated 330-million-dollar-fevenue in the current year. In a typical year, company's return on equity is 15 percent. You gathered the following three muttiples from a close competitor of ABT. The P/E (Price-Eamings) ratio is 30 , Price to sales (P/S) is 2.5, and price to book (P/B) ratio is 5 . Based on information given about ABT and its competitor, determine the value of ABT using market muliples approach. Based on your analysis, what is the falr value of ABT using P/S multiple?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To determine the fair value of AdvBioTech ABT Corporation using the PricetoSales PS ... View full answer

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!

Valu-Com Electronics manufactures five different models of telecommunications interface cards for personal and laptop computers. As summarized in the following table, each of these devices requires...

You and your team have just been hired by a privately owned company that is considering several strategic options. ITStaffing, Inc. ("ITS" or the "Company") is one of the fastest growing information...

Consider the following information: Rate of Return if State Occurs State of Economy Boom :57 Bust of Economy .66 .34 Probability of State Stock A .09 .13 Stock B Stock C .03 .19 .24 -.04 a. What is...

The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed...

You are sssigned to determine a fair value for AdvBioTech (ABT) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The...

You are assigned to determine a fair value for AdvBioTech (ABT) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The...

You are assigned to determine a tair value for AdvBioTech (ABT) Corporation. You determined that market multiples approach would be the best method to determine a fair value for this company. The...

Kinetic Corporation is considering acquiring High Tech Systems. Jim Smith, vice president of finance at Kinetic, has assigned the task of estimating a fair acquisition price for High Tech. Smith has...

a) Calculate the fair value of the investment in Indigo using the traditional approach. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answers to 0...

Parrish Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the companys cash outflow for operating expenses by $960,000 per year. The cost...

XYZ Company is a food maker company which starts with its first project in Dammam. This project is a restaurant where foods are served to customers 10 hours a day from 6 am till 4 PM. In order to put...

Which type of asset is weighted most heavily in determining a student's eligibility for federal financial aid? A . A U . S . savings bond owned by the parent. B . A 5 2 9 savings plan owned by the...

Determine the forces acting on the ends of the rope by (1) drawing the free-body diagram, (2) counting unknowns and equations to check determinacy, (3) writing the equilibrium equations, and (4)...

A book publisher wants to investigate the type of book selected for recreational reading by men and women. A random sample of 540 men and 500 women provided the following information regarding their...

In a three-phase balanced positive-sequence system a delta-connected source supplies power to a wye-connected load. If the line impedance is , the load impedance , and the source phase voltage Vab =...

The following are three independent situations. 1. Hairston Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Hairstons...

In what fundamental way do operational semantics and denotational semantics differ?

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

A regional airline company recently performed a customer survey in which it asked a random sample of 100 passengers to indicate their income and the total cost of the airfares they purchased for...

A sample of ten yields the following data: x 10 8 11 7 10 11 6 7 15 9 y 103 85 115 73 97 102 65 75 155 95 a. Provide a 95% confidence interval for the average y when xp = 9.4. b. Provide a 95%...

The following data have been collected by an accountant who is performing an audit of account balances for a major city billing department. The population from which the data were collected is the...