Answered

At Westonci.ca, we connect you with the best answers from a community of experienced and knowledgeable individuals. Connect with a community of experts ready to help you find accurate solutions to your questions quickly and efficiently. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

A company has revenues of $48 million and depreciation and amortization expenses of $8 million. Operating margin is 26%, net margin is 7% and gross margin is 57%. It has $24 million of debt, $7 million in cash, and 16 million shares outstanding. Comparable companies are trading at an average EV/EBITDA multiple of 19. How much are this company's shares worth using relative valuation

Sagot :

Tundexi

Answer:

$23.26

Explanation:

EBITDA = Revenue*Operating margin + Depreciation

EBITDA = $48*26% + $8

EBITDA = $12.48 + $8

EBITDA = $20.48

Share worth = (Worth - Debt + Cash) / Shares

Share worth = ($20.48*19 - $24 + $7) / 16

Share worth = ($389.12 - $24 + $7) / 16

Share worth = $372.12 / 16

Share worth = $23.2575

Share worth = $23.26

We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. We're glad you chose Westonci.ca. Revisit us for updated answers from our knowledgeable team.