1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Dmitry_Shevchenko [17]
3 years ago
12

You are trying to value the common stock shares BeGood Company using a market multiples approach. Begone just reported annual ea

rnings of $1.74 per share. BeGood is a privately held corporation and has three main publicly traded competitors. Below, the most recent price/earnings multiples are presented for each competitor: Competitor P/E Multiple
BeSafe 11.20
Y-Not 13.25
R-U-Sure 14.88
Based on this information, determine the share price of BeGood. Use the market multiple approach and compute to the second decimal place
Business
1 answer:
lakkis [162]3 years ago
7 0

Answer:

$22.81

Explanation:

We can easily calculate share price for BeeGood company just by multiplying the current earnings per share with an average P/E ration of competitors

P/E = Price earning ratio

EPS = Earning per share

Formula: Share price = PE x EPS

Share price = \frac{(11.2+13.25+14.88)}{3} x $1.74

Share price = $22.81

You might be interested in
If you own a small business, which of the following helps with your finances?
Montano1993 [528]

Answer:

C. Accountant

7 0
3 years ago
Read 2 more answers
A brand manager for a certain company must determine how much time to allocate between radio and television advertising during t
forsale [732]

Answer:

Optimization

Explanation:

Since we were told that the brand manager has limited budget of $25,000 which makes the manager to decide that television adverts is much more effective than radio adverts making him to allocates, at least 70% of the time to television, based on this I wiill run OPTIMIZATION test reason been that optimization will help and enable me to make the best or most effective use of available resource which will in turn Reduce costs while improving the performance which is why the brand manager decide to allocate 70% to Television in order to make the business more efficient as well as cost effective.

5 0
3 years ago
You must estimate the intrinsic value of Lowell Technologies’ stock. The end-of-year free cash flow (FCF1) is expected to be $30
Hunter-Best [27]

Answer:

Firm's estimated intrinsic value per share of common stock = $40.00

Explanation:

Intrinsic value:

Intrinsic value is a way of describing the perceived or true value of an asset.

Formula:

Intrinsic value = free cash flow / required rate - growth rate

As the end-of-year free cash flow (FCF1) = $30  and it is expected to grow at a constant rate of 5.0% a year thereafter.

so FCF2 = 30 (1 + 5%)

FCF2 = 31.5

Value at year 1 = FCF2 / required rate - growth rate

Therefore by putting the values in the above formula, we get

Value at year 1 = 31.5 / 0.08 - 0.05

Value at year 1 = 31.5 / 0.03

Value at year 1 = 1,050

As the company’s WACC is 8.0%, so

Value today = 30 / (1 + 0.08)1 + 1,050 / (1 + 0.08)1

Value today = $1,000 million

As stated in the question it has $200 million of long-term debt, and there are 20.0 million shares of common stock outstanding.

Intrinsic value = (1,000 - 200) / 20

Intrinsic value = $40.00

8 0
3 years ago
Dilithium Batteries is a division of Enterprise Corporation. The division manufactures and sells a long-life battery used in a w
katrin2010 [14]

Answer:

<em>Net Profit Under Absorption Costing for 60,000 units = $ 430,000                   for 90,000 units = $ 940,000</em>

<em>Net Profit  Under Variable Costing for 60,000 units = $ 250,000   for 90,000 units = $ 940,000</em>

Explanation:

Enterprise Corporation

Dilithium Batteries

Absorption Costing Income Statement,

                                                                               

                                                           60,000                 90,000

Sales                                               2100,000               3150,000

Manufacturing Costs                     1500,000                1980,000

Gross Profit                                    600,000                1170,000

Variable Selling and

Administrative Expenses              120,000                   180,000

<u>Fixed Selling & Ad. Expenses       50,000                      50,000</u>

<u>Net Profit                                        430,000                   940,000</u>

<u />

Enterprise Corporation

Dilithium Batteries

Variable Costing Income Statement,

                                                                               

                                                           60,000                 90,000

Sales                                               2100,000               3150,000

Variable

Manufacturing Costs                     960,000                1440,000

Variable Selling and

Administrative Expenses              120,000                   180,000

Contribution Margin                    840,000                1530,000

Fixed manufacturing overhead   540,000                  540,000

costs

<u>Fixed Selling & Ad. Expenses       50,000                      50,000</u>

<u>Net Profit                                        250,000                   940,000</u>

<u />

5 0
3 years ago
You are considering borrowing $10,000 for 3 years at an annual interest rate of 6%. The loan agreement calls for 3 equal payment
madam [21]
Hello! The answer would be D. $3,741. I hope this helps!
4 0
3 years ago
Other questions:
  • While building the ancient pyramids, the Egyptians performed several management functions. They submitted written requests and c
    11·1 answer
  • The nominal gdp of the u.s. in 2015 was approximately​ $17.3 trillion. this means that
    6·1 answer
  • The correct order to present current assets is ___________.
    7·1 answer
  • Name a time there was a change (higher or lower) in your budget for two goods. What were they? How did the change affect your co
    5·1 answer
  • Just-in-time management could be best defined in which of the following ways?Select one of the options below as your answer. A.
    9·1 answer
  • At its $60 selling price, Atlantic Company has sales of $15,000, variable manufacturing costs of $4,000, fixed manufacturing cos
    11·1 answer
  • Cole Co. began constructing a building for its own use in January 2016. During 2016, Cole incurred interest of $50,000 on specif
    12·1 answer
  • LO 4.1Which of the following is a conversion cost?
    6·1 answer
  • Brite-Way Lighting is based in California and sells products within the United States as well as to ten foreign countries. Brite
    14·1 answer
  • What is true about economic resources? A) Economic resources include only money. B) Economic resources are limited. C) Economic
    9·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!