Question $1\mathrm{.}4$: Equity versus Enterprise Value $(5$p$.)$

Please find information below on components of enterprise value and profitability for German consumer

goods companies Beiersdorf and Henkel. Use this information to answer the questions below.

A$.(2$p$.)$ In applying valuation multiples, analysts and investors can choose between equity and enterprise

value multiples. Why do analysts and investors prefer enterprise value multiples to compare relative valuation

between companies?

B$.(2$p$.)$ In deriving the enterprise value for both Beiersdorf and Henkel, the total cash is deducted from both

company's debt position. What does this suggest about the nature of the cash in these businesses?

C$.(1$p$.)$ In your view, Beiersdorf is overvalued and should be trading on an EV$/$BITDA multiple of $12$x$.$ What

is your estimate of the value per share based on this EV$/$EBITDA multiple?