Terrence is an investment banker who is taking Allworld Sports Apparel Inc. public. Allworld has indicated...
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Terrence is an investment banker who is taking Allworld Sports Apparel Inc. public. Allworld has indicated that they will have net income next year (t-1) of $80 million and earnings before interest (EBIT) and tax of $135 million next year. Following the new issue, Allworld will have debt of $900 million, cash of $120 million and 40 million shares outstanding. Terrence needs to calculate a price for the new public issue (IPO) for Allworld and has collected the following information on publicly-traded comparable companies. Based on the P/E multiple, what is Terrence's estimate of price for Allworld? (Show your work and justify your answer) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial 5 C |||| = = = = E +8 8:0 田田田 Company Nike Under Armour <> † Lululemon Gildan X² X₂ {;} V 14px 28 Ⓒ P/E forward 32.92 33.87 48.26 15.89 >ITT< R7 KU (+) V 田く - + EV/EBIT forward ABC 33.38 19.58 45.01 15.91 V A V ✓ V ΠΠΩ Ix X Q X : 8.80 QUESTION 2 Based on the EV/EBIT, what is Terrence's estimate of price for Allworld? (show your work and justify your answer). For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial रु ते A EE EEEE X² X₂ 田田 EXE 38 80 13 <> T 14px »¶¶< 57 KD + V : v - +] V A V I ΠΩ 15 HV Terrence is an investment banker who is taking Allworld Sports Apparel Inc. public. Allworld has indicated that they will have net income next year (t-1) of $80 million and earnings before interest (EBIT) and tax of $135 million next year. Following the new issue, Allworld will have debt of $900 million, cash of $120 million and 40 million shares outstanding. Terrence needs to calculate a price for the new public issue (IPO) for Allworld and has collected the following information on publicly-traded comparable companies. Based on the P/E multiple, what is Terrence's estimate of price for Allworld? (Show your work and justify your answer) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial 5 C |||| = = = = E +8 8:0 田田田 Company Nike Under Armour <> † Lululemon Gildan X² X₂ {;} V 14px 28 Ⓒ P/E forward 32.92 33.87 48.26 15.89 >ITT< R7 KU (+) V 田く - + EV/EBIT forward ABC 33.38 19.58 45.01 15.91 V A V ✓ V ΠΠΩ Ix X Q X : 8.80 QUESTION 2 Based on the EV/EBIT, what is Terrence's estimate of price for Allworld? (show your work and justify your answer). For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS Paragraph v Arial रु ते A EE EEEE X² X₂ 田田 EXE 38 80 13 <> T 14px »¶¶< 57 KD + V : v - +] V A V I ΠΩ 15 HV
Expert Answer:
Answer rating: 100% (QA)
To estimate the price for Allworld Sports Apparel Inc using the PE multiple and EVEBIT multiple Terrence can use the following calculations PE Multipl... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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