The following table shows statistics on 10 Feb 2021 for firms in the Material sector in...

 

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The following table shows statistics on 10 Feb 2021 for firms in the Material sector in Australia. Calculate the share price of Rio Tinto using relative valuation approach. If you exclude any of the firms in your analysis, justify why. Then compare the share price obtained from relative share valuation approach with Rio's share price on 10 Feb 2021. What do you conclude from this comparison? Would you buy or sell the share? Explain your answer clearly and show all your workings. ASX code Earnings BHP Billiton Newcrest Mining Ltd Fortescue Metal group Brickworks Limited Mineral Resources Limited Sims Limited Sandfire resources Limited Tribune Resources OZ Minerals Limited Rio Tinto Group BHP.AX NCM.AX FMG.AX BKW.AX MIN.AX SGM.AX SFR.AX TBR.AX OZL.AX RIO.AX $7.96 billion $647 million $4.74 billion $315.39 million $1 billion -$265.3 million $74.05 million $199.8 million Number of share $7.2 billion outstanding 2.95 billion 816.56 million 3.08B 151.6 million 188.6 million $49.15 million 52.47 million 201.47 million 178.25 million 331.29 million 1.25 billion Share Price on 10 Feb 2021 $45.00 $25.26 $23.95 $19.83 $36.75 $12.86 $4.97 $5.86 $18.85 $117.01 The following table shows statistics on 10 Feb 2021 for firms in the Material sector in Australia. Calculate the share price of Rio Tinto using relative valuation approach. If you exclude any of the firms in your analysis, justify why. Then compare the share price obtained from relative share valuation approach with Rio's share price on 10 Feb 2021. What do you conclude from this comparison? Would you buy or sell the share? Explain your answer clearly and show all your workings. ASX code Earnings BHP Billiton Newcrest Mining Ltd Fortescue Metal group Brickworks Limited Mineral Resources Limited Sims Limited Sandfire resources Limited Tribune Resources OZ Minerals Limited Rio Tinto Group BHP.AX NCM.AX FMG.AX BKW.AX MIN.AX SGM.AX SFR.AX TBR.AX OZL.AX RIO.AX $7.96 billion $647 million $4.74 billion $315.39 million $1 billion -$265.3 million $74.05 million $199.8 million Number of share $7.2 billion outstanding 2.95 billion 816.56 million 3.08B 151.6 million 188.6 million $49.15 million 52.47 million 201.47 million 178.25 million 331.29 million 1.25 billion Share Price on 10 Feb 2021 $45.00 $25.26 $23.95 $19.83 $36.75 $12.86 $4.97 $5.86 $18.85 $117.01

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