FFDP Corp. has yearly sales of $29.8 million and costs of $15.5 million. The company’s balance sheet shows debt of $55.8 million and cash of $39.8 million. There are 1,960,000 shares outstanding and the industry EV/EBITDA multiple is 9.3. What is the company’s enterprise value? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) What is the stock price per share? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answers
Answer:
$59.68 million per share
Explanation:
The computation of stock price per share is shown below:-
Earnings Before Interest , depreciation, taxes and amortization (EBITDA) = Sales - Cost
= $29.8 million - $15.5 million
= $14.3 million
Enterprise Value ÷ EBITDA = 9.3
Hence, Enterprise Value = EBITDA × 9.3
= $14.3 million × 9.3
= $132.99 million
Enterprise Value = Value of Equity + Debt - Cash
or Value of Equity = $132.99 million - $55.8 million + $39.8 million
= $116.99 million
Now,
Stock Price Per share = Value of Equity ÷ Number of Shares Outstanding
= $116.99 million ÷ 1,960,000
= $59.68 million per share
Final answer:
The company's Enterprise Value (EV) is $132,990,000 and the stock price per share is $60.20. The EV was calculated by multiplying the firm's EBITDA ($14.3 million) by the industry EV/EBITDA multiple (9.3). The stock price per share was determined by dividing the Market Capitalization ($117,990,000) by the shares outstanding (1,960,000).
Explanation:
To respond your question, we first need to calculate the company’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA). In this case, since only sales and costs are given, let's assume that EBITDA is the company’s sales minus costs. Therefore, EBITDA = $29.8 million - $15.5 million = $14.3 million. Secondly, the Enterprise Value (EV) is determined as the product of the company’s EBITDA and the industry EV/EBITDA multiple. EV = $14.3 million * 9.3 = $132.99 million. But keep in mind to enter your answer in dollars, not millions of dollars. So, the EV = $132,990,000.
To calculate the stock price per share, we must first calculate the Market Capitalization of the company. The Market Capitalization is the EV minus the net debt (which is the company's debt minus the cash). Market Capitalization = EV - (Debt - Cash) = $132,990,000 - ($55,800,000 - $39,800,000) = $117,990,000.
Lastly, we get the stock price per share by dividing the Market Capitalization by the number of shares outstanding. Stock price per share = $117,990,000 / 1,960,000 shares = $60.20. So, the stock price per share would be $60.20 returned to 2 decimal places.
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Related Questions
Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the October 9 sale consisted of 55 units from beginning inventory and 185 units from the October 5 purchase; the October 29 sale consisted of 35 units from the October 18 purchase and 75 units from the October 25 purchase. (Round your average cost per unit to 2 decimal places.)
On August 1, 2021, Trico Technologies, an aeronautic electronics company, borrows $20.6 million cash to expand operations. The loan is made by FirstBanc Corp. under a short-term line of credit arrangement. Trico signs a six-month, 6% promissory note. Interest is payable at maturity. FirstBanc Corp.’s year-end is December 31.Required:1. Record the issuance of note.2. Record the adjustment for interest.3. Record the repayment of the note at maturity.
in which order would the expectancy theory place the following events? a) outcome valence, performance, effort b) performance, effort, outcome valence c) effort, outcome valence, performance d) performance, outcome valence, effort e) effort, performance, outcome valence
You are a project manager for a software manufacturing firm. The project you just finished created a new software product that is expected to become a number-one seller. All prerelease of software is handled through the marketing department. A friend of yours, who is a certified software instructor, asks you for a copy of the software prior to the beta release so they can become familiar with it. What is the most appropriate response?
Answers
Answer:
spreading the cost of an asset over its useful life to the entity.
Explanation:
The depreciation is a non-cash expense that should be charged over the fixed assets i.e. land, buidling, car, etc
It is an expense so the same should be shown on the debit side of the income statement
Also the cost of an asset minus the salvage value divided by the useful life could be spreaded as the depredciation expense by using straight-line method
b. Income is transferred from consumers in the importing nation to domestic producers
c. Income is transferred from consumers in the importing nation to their government
d. All of the above
e. None of the above
Answers
Answer:
Explanation:
An import restriction as the term implies is done to limit the amount of a certain good that is imported into the country. Usually this is done to protect the domestic producers of the good in question who are not be as efficient as the country being imported from and so charge higher prices.
The people in the economy will experience a net loss in welfare because they will now be paying higher prices and as well will be transferring some of their income to their government because import restrictions like tariffs will see their costs passed on to the consumer.
Answers
Answer:
The company could pay up to 866,965.89 dollars today to solve the current heat exchanger situation
Explanation:
We have to determinate the present value of 7 year annuity which increase at a rate of 7% when the cost of capital is 15% being the first quota 175,000 dollars
grow rate 0.07
required return 0.15
Cuota 175,000
n 7
PV = 866,965.89
Answers
Answer:
Explanation:
1. The journal entry for declaration of dividend is shown below:
Retained Earnings A/c Dr
= (8,600 million shares × $0.18 per share) = $1,548 million
To Dividend payable in cash $1,548 million
(Being dividend is declared)
2. No journal entry should be passed on the record date
3. The journal entry for payment of the cash dividend is shown below:
Cash dividend payable A/c Dr $1,548 million
To Cash $1,5480 million
(Being payment is made for cash dividend)
Final answer:
The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares involve debiting retained earnings and crediting dividends payable on the declaration date, and debiting dividends payable and crediting cash on the payment date.
Explanation:
The journal entries made by BusinessSoftware Corp. to record the declaration and payment of the cash dividend for its 8,600 million shares would be as follows:
- Declaration Date:
- Retained Earnings DR $1,548,000 (8,600 million shares x $0.18 per share)
- Dividends Payable CR $1,548,000
- Payment Date:
- Dividends Payable DR $1,548,000
- Cash CR $1,548,000
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Answers
Answer:
25 chairs per employee.
Explanation:
In this case labour productivity is the number of dining chairs per day over number of employees.
An average of 600 standard dining chairs were assembled per 6-day work week.
This means that, the number of dining chairs assembled per day is
The number if employees is 4.
Therefore the labour productivity of this operation is:
per employee.
Check all that apply.
O Send a separate letter to each interviewer.
O Use a business letter format.
O Mention something you liked about the interview.
O Send thank-you letters to prospective coworkers.
O Send a quick text to the interviewer
Answers
Answer:
The answers that seem to be correct are *Mention something you liked about the interview and *Use a business letter format. This would be a polite and friendly kind of a feedback mixed with good professionalism.
Explanation:
Now let's see why we rejected the other answer options.
1st of all, Sending a separate letter to each interviewer might be difficult as it could be really difficult to find the contact information of all the interviewers.
Sending thank-you letters to prospective co-workers is not a appropriate thing as you have not been selected still for the job.
Sending a quick text to the interviewer might not be appropriate as well. This is because those who interviewed you during the process are much more experienced and qualified than you and you should maintain your relationship with them professionally and with the utmost respect.