hw10 - price. Is this an equity valuation or an enterprise...

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Seongjae Lee Brigham Young University Department of Finance ManEc 453 Money, Banking and Financial Markets Problem set #10 Due: November 16, 2011 Questions 1. What is the Market Value of the Company your group is assigned to follow: Company: Ebay Market Value What is the Enterprise Value of the same company? What accounts for the difference? $ 2.54 B - $ 4.01 B = -1.47 B 2. Suppose that you were going to make an offer to buy the small privately held company, Rockwell, Inc. Use the financial statements (Dec 31, 2010 as found on blackboard under Course Documents) to assist in arriving at your offer price.
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Unformatted text preview: price. Is this an equity valuation or an enterprise valuation? Historical data for the company: 2007 2008 2009 2010 Sales 1,115,580 1,276,043 1,346,179 1,985,251 Net Income (9,325) (138,196) (106,575) 134,290 EBITDA Err:510 Purchase Offer: $ Err:510 Is this an equity valuation or an enterprise valuation? 1,985,251 Err:510 * average of two valuations: Err:510 $ 39.43 billion $ 39.13 billion Total cash: $ 4.01 billion Total debt: $ 2.54 billion enterprise valuation 1) valuation by sales: 2) valuation by EBITDA:...
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This note was uploaded on 12/29/2011 for the course BUS 453 taught by Professor Jerrynelson during the Fall '11 term at BYU.

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