Compare your valuation with market stock price

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Reference no: EM131980629

A. Value stock of a publicly traded firm using enterprise value / sales ratio. Show all calculations by hand.

B. Compare your valuation with market stock price. Is the firm overvalued or undervalued?

C. What is the major criticism of valuations based on multiples? Note: when we criticise valuation models, we criticize assumptions. What do we assume when we use multiples?

For industry enterprise value / sales ratio, use either Damodaran’s website (pages.stern.nyu.edu/~adamodar), or average for a subsample of ten firms in the industry of your choice. If you estimate multiple using your own dataset, show your estimates.

Reference no: EM131980629

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