Use the following to answer questions 26 through 30: Shamrock Inc. has total assets of $16...

Use the following to answer questions 26 through 30:

Shamrock Inc. has total assets of $16 million including cash and marketable securities of $3 million, debt of $2 million, book value of equity of $11 million and market value of equity of $33 million. Last year EBITDA was $4 million and net earnings were $2.2 million.

______26) Total liabilities equal _________.

A. $2.0 million B. $5.0 million C. $7.0 million D. Some other amount

______27) What is the enterprise value of the company?

A. $32.0 million B. $33.0 million C. $34.0 million D. Some other amount

______28) The price to earnings ratio is closest to:

A. 5 times B. 8 times C. 8.25 times D. 15 times

Expert Solution

	Given,
	Total assets	$16 millions	(out of which $3 millions is cash and marketable securities)
	Debt	$2 millions
	Book value of equity	$11 millions
	Market value of equity	$33 millions
	EBITDA	$4 millions
	Net earnings	$2.2 millions

26)	Total liabilities= Total assets-Book value of equity
		$(16-11) millions
		$ 5 millions

	Answer: Option B

27)	Enterprise value of the company= Market value of equity+Value of debt-Cash and marketable securities
		$(33+2-3) millions
		$ 32 millions

	Answer: Option A

28)	Price Earnings ratio= Market capitalisation/Total net earnings
		$33 millions/2.2 millions
		15 times

	Answer: Option D

jeff jeffy answered 2 years ago

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