Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. Applied Materials KLA Tencor Lam Research (in millions) $11,418 Company assumed value $9,679 Equity assumed value $13,133 $8,876 NOPAT $1,444 $440 $674 $1,377 Net Income $366 $656 Net nonoperating obligations (assets) $(1,369) $(1,715) $803 Common shares outstanding 1,160.0 157.9 158.5 a. Compute the price to net income ratio for both KLA Tencor Corporation and Lam Research Corporation. Round answers to two decimal places, when applicable. Price to Net income ratio KLA Tencor 26.45 Lam Research 17,21 b. Use KLA Tencor Corporation and Lam Research Corporation as comparables, along with the price to net income ratios from part a, and then estimate for Applied Materials its equity intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. Round equity intrinsic values to the nearest million. Round equity intrinsic value per share to two decimal places. KLA Tencor Corporation million Company Intrinsic value 0 million Equity intrinsic value 0 Equity intrinsic value per share Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. Applied Materials KLA Tencor Lam Research (in millions) $11,418 Company assumed value $9,679 Equity assumed value $13,133 $8,876 NOPAT $1,444 $440 $674 $1,377 Net Income $366 $656 Net nonoperating obligations (assets) $(1,369) $(1,715) $803 Common shares outstanding 1,160.0 157.9 158.5 a. Compute the price to net income ratio for both KLA Tencor Corporation and Lam Research Corporation. Round answers to two decimal places, when applicable. Price to Net income ratio KLA Tencor 26.45 Lam Research 17,21 b. Use KLA Tencor Corporation and Lam Research Corporation as comparables, along with the price to net income ratios from part a, and then estimate for Applied Materials its equity intrinsic value, its equity intrinsic value, and its equity intrinsic value per share. Round equity intrinsic values to the nearest million. Round equity intrinsic value per share to two decimal places. KLA Tencor Corporation million Company Intrinsic value 0 million Equity intrinsic value 0 Equity intrinsic value per share