Question

In: Finance

Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this...

Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $364M and earnings of $29M. Detox company has filed a registration statement with the SEC for its IPO. If the industry average MV/Earnings ratio and MV/Revenues ratio for the recent fiscal year were 20.19 and 0.59 respectively. Estimate the IPO price for Detox Company using the MV/Earnings ratio and assuming that they will issue 20M shares.

Solutions

Expert Solution

Detox Company market value

=MV/Earnings ratio*earnings

=20.19*29

=585.51 million

the IPO price for Detox Company

=Detox Company market value/number of shares

=585.51/20

=29.28

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this...
Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $367M and earnings of $27M. Detox company has filed a registration statement with the SEC for its IPO. If the industry average MV/Earnings ratio and MV/Revenues ratio for the recent fiscal year were 27.08 and 0.64 respectively. Estimate the IPO price for Detox Company using the MV/Revenues ratio and assuming that they will issue 21M shares.
Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this...
Company Detox, is a private company that designs, manufactures and distributes certain consumer products. In this fiscal year, Detox had revenues of $404M and earnings of $18M. Detox company has filed a registration statement with the SEC for its IPO. If the industry average MV/Earnings ratio and MV/Revenues ratio for the recent fiscal year were 30.62 and 0.85 respectively. Estimate the IPO price for Detox Company using the MV/Earnings ratio and assuming that they will issue 22M shares.
Company detox, is a private company that designs, manufactures and distributes certain consumer products. in this...
Company detox, is a private company that designs, manufactures and distributes certain consumer products. in this fiscal year detox had revenues of 389M and earnings of 15M. Detox company has filed a registration statement with the SEC for its IPO. If the industry average MV/earnings and MV/revenues ratio for the recent fiscal year were 32.25 and 0.82 respectively. Estimate the IPO price for detox company using the MV, earnings ratio and assuming that they will issue 29M shares.
A company is engaged in the manufacture of certain leather consumer products. The products are shoes,...
A company is engaged in the manufacture of certain leather consumer products. The products are shoes, ladies leather hand bags, purses and belts. The company accounted for about 10% of the market share in shoes, which is its main product. Since last year, the company has been facing stiff competition from another firm which has come up recently in the city. This is reflected in the declining monthly sale. The company is concerned over this development and would like to...
1. A US company designs its products in US but manufactures those products in China. a)...
1. A US company designs its products in US but manufactures those products in China. a) What type of currency exposure the US Company will face? b) List three strategies to manage the operation exposure, and explain how they can be used to hedge the operation exposure. 2. A US company has a manufacturing subsidiary in Brazil and it categorizes Brazilian Real as the functional currency. a) Explains the concept of functional currency; b) Under US accounting, what currency translation...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products,...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter—July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products,...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter—July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products,...
Franklin Products Limited manufactures and distributes a number of products to retailers. One of these products, SuperStick, requires five kilograms of material D236 in the manufacture of each unit. The company is now planning raw materials needs for the third quarter—July, August, and September. Peak sales of SuperStick occur in the third quarter of each year. To keep production and shipments moving smoothly, the company has the following inventory requirements: The finished goods inventory on hand at the end of...
Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes...
Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mobile phones (cPhone), and smartwatches (Cannington Watch) along with related accessories and services, including online distribution of third-party music, videos, and applications. The following information was taken from a recent annual report of Cannington: Property, Plant, and Equipment (in millions): Current Year Preceding Year Land and buildings $569,240 $330,159 Machinery, equipment, and internal-use software 540,778 426,930 Other fixed assets 688,780 518,008...
Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes...
Cannington Inc. designs, manufactures, and markets personal computers and related software. Cannington also manufactures and distributes music players (cPod), mobile phones (cPhone), and smartwatches (Cannington Watch) along with related accessories and services, including online distribution of third-party music, videos, and applications. The following information was taken from a recent annual report of Cannington: Property, Plant, and Equipment (in millions): Current Year Preceding Year Land and buildings $494,500    $286,810      Machinery, equipment, and internal-use software 469,775    370,875      Other fixed assets 598,345    449,995     ...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT