Question: Please answer the two questions that go with this problem. The CFO of TDW Manufacturing is attempting to determine which of the firm's four main

Please answer the two questions that go with this problem.

The CFO of TDW Manufacturing is attempting to determine which of the firm's four main competitors is the most undervalued as compared to the others. TDW's industry and business can be characterized as mature. The team that has been assigned the analytical evaluation of these companies has determined that the best valuation method for this effort is the Enterprise Value to EBITDA method. Provide three reasons why they may have reached this determination. (3 points) Using the financial information provided below use Enterprise Value to EBITDA to determine which of TDW's competitors is the most undervalued as compared to the others. (7 points) Competitor Competitor 4 Competitor 2 $95 Competitor 3 $88 $73 $106 51 65 64 71 Sin Millions Revenues Cost of Sales Operating Expenses Interest Expense Taxes 18 22 16 20 6 5 6 7 3 (2) 1 1 4 5 G 7 Depreciation Mkt. Value of common Equity 53 71 91 132 Market value of Debt 12 2 19 s > 16 7 Cash 14 4 20 49 15 23 Other Current Assets Long term Assets Current Liabilities 43 SO 29 53 16 20 13 14 13 Long term Liabilities 15 18 24 The CFO of TDW Manufacturing is attempting to determine which of the firm's four main competitors is the most undervalued as compared to the others. TDW's industry and business can be characterized as mature. The team that has been assigned the analytical evaluation of these companies has determined that the best valuation method for this effort is the Enterprise Value to EBITDA method. Provide three reasons why they may have reached this determination. (3 points) Using the financial information provided below use Enterprise Value to EBITDA to determine which of TDW's competitors is the most undervalued as compared to the others. (7 points) Competitor Competitor 4 Competitor 2 $95 Competitor 3 $88 $73 $106 51 65 64 71 Sin Millions Revenues Cost of Sales Operating Expenses Interest Expense Taxes 18 22 16 20 6 5 6 7 3 (2) 1 1 4 5 G 7 Depreciation Mkt. Value of common Equity 53 71 91 132 Market value of Debt 12 2 19 s > 16 7 Cash 14 4 20 49 15 23 Other Current Assets Long term Assets Current Liabilities 43 SO 29 53 16 20 13 14 13 Long term Liabilities 15 18 24

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