Question: Please show work and explain. P15-36. Identifying Comparables and Estimating Equity Value Using PE Assume that your superior requests that you estimate the equity intrinsic

 Please show work and explain. P15-36. Identifying Comparables and Estimating Equity

Please show work and explain.

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 companiesCGI Group is one of the world's largest information technology and business process services companies. The following online data are available from various companies. LO2, 3 CGI GROUP INC. (GIB) Market Cap ($ mil.) Forward PE EPS 5-Year Historical Growth Rate ROE (T 4Q) Ticker Debt-to-Equity (Prior Q) GIB. EQIX. JCOM. NTES CDW. IT LDOS EPAM. DXC CACI.. $48,550 4,344 33,660 17,160 12,920 12,370 9,971 8,105 5,635 88.91 12.63 19.75 9.08 40.35 18.27 34.39 4.25 18.52 16.52% 18.99% 2.71% 5.23% 38.04% (7.28)% 14.69% 27.11% (6.57)% 13.11% 18.14% 6.45% 13.97% 18.88% 68.32% 24.26% 19.61% 19.36% 10.31% 11.80% 0.38 1.10 1.04 0.27 3.50 2.26 0.90 0.02 0.82 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 $958 million. c. Prepare a memorandum to your superior identifying any issues that you believe should be considered before using the equity intrinsic value from part b for business decisions. P15-36. Identifying Comparables and Estimating Equity Value Using PE Assume that your superior requests that you estimate the equity intrinsic value of CGI Group Inc. using PE ratios for comparable companiesCGI Group is one of the world's largest information technology and business process services companies. The following online data are available from various companies. LO2, 3 CGI GROUP INC. (GIB) Market Cap ($ mil.) Forward PE EPS 5-Year Historical Growth Rate ROE (T 4Q) Ticker Debt-to-Equity (Prior Q) GIB. EQIX. JCOM. NTES CDW. IT LDOS EPAM. DXC CACI.. $48,550 4,344 33,660 17,160 12,920 12,370 9,971 8,105 5,635 88.91 12.63 19.75 9.08 40.35 18.27 34.39 4.25 18.52 16.52% 18.99% 2.71% 5.23% 38.04% (7.28)% 14.69% 27.11% (6.57)% 13.11% 18.14% 6.45% 13.97% 18.88% 68.32% 24.26% 19.61% 19.36% 10.31% 11.80% 0.38 1.10 1.04 0.27 3.50 2.26 0.90 0.02 0.82 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

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