Identify Comparables and Estimating Equity Value Using PE

Assume that your superior requests that you estimate the equity intrinsic value of CGI Group Inc. using PE ratios for comparable companies... *the entire problem is in the screenshot below, looking for an answer to A, B, & C

P15-36. Identifying Comparables and Estimating Equity Value Using PE Assume that your superior requests that you estimate the equity intrinsic value of CGI Group Inc. using PE ratios for comparable companies-CGI Group is one of the world's largest information technology and business process services companies. The following online data are available from various companies. Market Cap Forward EPS 5-Year Historical ROE Debt-to-Equity Ticker ($ mil.) PE Growth Rate (T 4Q) (Prior Q) GIB . . . 16.52% 18. 14% 0.38 EQIX. . $48,550 88.91 18.99% 6.45% 1.10 JCOM ....... 4,344 12.63 2.71% 13.97% 1.04 NTES 33,660 19.75 5.23% 18.88% 0.27 CDW. .. 17, 160 9.08 38.04% 68.32% 3.50 IT ... 12,920 40.35 (7.28)% 24.26% 2.26 LDOS . . .... 12,370 18.27 14.69% 19.61% 0.90 EPAM . . . 9,971 34.39 27.11% 19.36% 0.02 DXC .... 8,105 4.25 (6.57)% 10.31% 0.82 CACI. .. 5,635 18.52 13.11% 11.80% 0.70 Required a. Identify the set of companies you plan to use as comparables. (Hint: Consider each company on the basis of growth and financial risk.) b. Estimate the equity intrinsic value of CGI Group. Its earnings estimate is $958 million. c. Prepare a memorandum to your superior identifying any issues that you believe should be considered before using the equity intrinsic value from part b for business decisions