Question: Using the handout you have been provided and the data on the above table, value the acquisition of El Paso using EOG as the only

Using the handout you have been provided and the data on the above table, value the acquisition of El Paso using EOG as the only comparable firm.

ANSWER THE FOLLOWING QUESTIONS:

PART A: KINDER MORGAN ANNOUNCED THEY ARE PURCHASING EL PASO. WHAT IS THE ENTERPRISE VALUE (EV) OF EL PASO USING THE EBITDA MULTIPLE METHOD OF VALUATION? SHOW YOUR WORK TO RECEIVE CREDIT! Use EOG as the comparable.

PART B: FROM THE RESULT OF PART A, CALCULATE THE EQUITY VALUE OF EL PASO USING THE EBITDA MULTIPLE METHOD OF VALUATION. SHOW YOUR WORK TO RECEIVE CREDIT! Use EOG as the comparable.

PART C: WHAT IS THE EQUITY VALUE OF EL PASO USING THE P/E MULTIPLE METHOD? SHOW YOUR WORK TO RECEIVE CREDIT. Again, use EOG as the comparable.

PART D: KINDER MORGAN ANNOUNCED THEY ARE PAYING $10.00 PER SHARE FOR EL PASO. BASED ON YOUR CALCULATIONS, IS THIS A GOOD DEAL FOR THE SHAREHOLDERS OF EL PASO? (You can use the results you get from Part B or from Part C to answer this question).

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