Jorge Zaldys, CFA, is investigating the relative valuation of two companies in the aerospace/defence industry, NCI Heavy Industries (NCI) and Relay Group International (RGI). 

He has compiled relevant information about the companies in the following table.

relative valuation
Information	RGI	NCI
EBITDA	100	100
Interest expenses	0	20
earnings before taxes	100	80
Tax (40%)	40	32
Net Income	60	48
Cash and Short Term Investments	40	20
Debt MV	0	400
BV of debt	0	350
Price per share	10	20
Outstanding shares	100	30

Calculate RGI's EV/EBITDA and P/E ratio.

Answer rating: 100% (QA)

To calculate RGIs EVEBITDA we need to first calculate RGIs Enterprise V... View the full answer