Calculated from stock prices and the number of shares

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Question: Value MBS using valuation by comparables, taking the following into consideration: The case provides you with information on comparable firms that allows you to calculate three valuation multiples: the P/E (or Equity/Net income) ratio, and the EV/EBIT and EV/Sales multiples. The P/E ratio can be calculated as stock price per share divided by earnings per share, or as market value of equity divided by net income. Equity values can be calculated from stock prices and the number of shares outstanding. Enterprise values can be calculated from equity values, cash, and debt. After you have calculated the valuation multiples for the comparables, average them, and apply the average multiple to MBS. You should use MBS's forecasted net income, EBIT, and sales for 2018 (instead of the 2017 numbers) to account for MBS's expected growth. See Question 2 for the assumptions needed to make these forecasts. You do not need MBS's number of shares outstanding for any of these calculations.

Reference no: EM133344238

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