1. Use the tables below to answer the following questions.
   a. Calculate the fair equity value for XYZ Steel Company based on global peer comparison (relative valuation/multiple valuation) method. Please use given weights below for the multiples using your valuation. Current price of the Company is 10 USD/share
2. 
   
3. b. Please identify whether the company is over/undervalued according to your calculation?
   
     

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th sta int ag es ea di EA Assets Current Assets Cash Accounts Receivable Inventory Total Current Assets Fixed Assets Property, Plant, and Equipment Less Accumulated Depreciation Net Fixed Assets Total Assets Global Steel Companies Balance Sheet ($ in Mn) 2019 710 670 1260 2640 1200 137 1063 3703 BORUSAN BORU USINAS SIDERURGICAS DE MINAS GERAIS,S.A. STALPRODUKT SA KORSHUNOVSKII GOK 2018 600 600 1100 2300 1100 80 1020 3320 Country Liabilities and Owners' Equity Current Liabilities Accounts Payable Notes Payable Median Total Current Liabilities Long Term Debt Total Long Term Liabilities Common Stock Capital Surplus Retained Earnings Turkey Brazil Poland Russian Federation CMK Russian Federation: CIA DE FERRO UGAS DA BAHIA-FERBASA Brazil AL EZZ DEKHEILA STEEL-ALEXANDRIA Egypt CORPORACION ACEROS AREQUIPA S.A. (CORAREC1) Peru CAP S.A. Chile METALURGICA GERDAU SA Brazil KARDEMIR (A) Turkey Weights Total Owners' Equity Total Liabilities and Owners' Equity Total Market Cap (mn.) 278 1,727 266 172 126 242 476 298 1,143 784 525 2019 2018 410 330 740 1916 1916 370 450 227 1047 3703 P/BV 0.54 051 041 0.34 370 Se 0.20 270 054 0.76 0.51 6:40 1730 1730 0.57 0.32 0.71 340 0.51 Sales Cost of Goods Sold Administrative Expenses Depreciation Earnings Before Interest and Taxes 440 30% 170 950 3320 Income Statement (S in Mn.) Interest Expense Taxable Income Taxes Net Income Dividends P/E alion 8.88 18.34 6.36 4.65 0.56 3.93 3.88 6.00 152.68 6.03 5.26 P/Sales 6.00 20% 0.30 0.46 0.26 1.31 0.08 0.73 0.24 0.37 2019 1400 800 0.68 0.07 0.47 100 37 443 EV/Sales 0.37 150 10% 293 51 242 185 0.72 116 sumes ver, whi ld. 1.22 1.91 EV/EBITDA 1.50 2.33 0.58 1.62 1.82 0.90 0.97 1.22 10% 7 th sta int ag es ea di EA Assets Current Assets Cash Accounts Receivable Inventory Total Current Assets Fixed Assets Property, Plant, and Equipment Less Accumulated Depreciation Net Fixed Assets Total Assets Global Steel Companies Balance Sheet ($ in Mn) 2019 710 670 1260 2640 1200 137 1063 3703 BORUSAN BORU USINAS SIDERURGICAS DE MINAS GERAIS,S.A. STALPRODUKT SA KORSHUNOVSKII GOK 2018 600 600 1100 2300 1100 80 1020 3320 Country Liabilities and Owners' Equity Current Liabilities Accounts Payable Notes Payable Median Total Current Liabilities Long Term Debt Total Long Term Liabilities Common Stock Capital Surplus Retained Earnings Turkey Brazil Poland Russian Federation CMK Russian Federation: CIA DE FERRO UGAS DA BAHIA-FERBASA Brazil AL EZZ DEKHEILA STEEL-ALEXANDRIA Egypt CORPORACION ACEROS AREQUIPA S.A. (CORAREC1) Peru CAP S.A. Chile METALURGICA GERDAU SA Brazil KARDEMIR (A) Turkey Weights Total Owners' Equity Total Liabilities and Owners' Equity Total Market Cap (mn.) 278 1,727 266 172 126 242 476 298 1,143 784 525 2019 2018 410 330 740 1916 1916 370 450 227 1047 3703 P/BV 0.54 051 041 0.34 370 Se 0.20 270 054 0.76 0.51 6:40 1730 1730 0.57 0.32 0.71 340 0.51 Sales Cost of Goods Sold Administrative Expenses Depreciation Earnings Before Interest and Taxes 440 30% 170 950 3320 Income Statement (S in Mn.) Interest Expense Taxable Income Taxes Net Income Dividends P/E alion 8.88 18.34 6.36 4.65 0.56 3.93 3.88 6.00 152.68 6.03 5.26 P/Sales 6.00 20% 0.30 0.46 0.26 1.31 0.08 0.73 0.24 0.37 2019 1400 800 0.68 0.07 0.47 100 37 443 EV/Sales 0.37 150 10% 293 51 242 185 0.72 116 sumes ver, whi ld. 1.22 1.91 EV/EBITDA 1.50 2.33 0.58 1.62 1.82 0.90 0.97 1.22 10% 7

Answer rating: 100% (QA)

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