Determine the purchase offer

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Reference no: EM133115758

Trent Corporation is considering acquiring a local family business, Trevor Inc., and trying to determine the purchase offer.

The valuation team selects three of Trevor Inc.'s close competitors as comparables. All comps are publicly traded.

The price-to-earnings multiples of comps are 20, 17, and 9.

The valuation team estimates that next year Trevor inc. will achieve net income of $4 million and EPS of $0.8.

If the valuation team decides to use the mean of comps' multiples as benchmark, apply the multiples model to estimate the implied price of Trevor inc.

Reference no: EM133115758

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