Develop an estimate of the market capitalization

Assignment Help Managerial Accounting
Reference no: EM132855547

Question - Ruth's Chris Steak House is a chain of restaurants that began 43 years ago as a single location in New Orleans and has grown to more than 90 restaurants. RCSH went public, with an initial public offering of stock (IPO) in August 2005. A question at the time of the IPO was how to value the company, given available information. Ruth's had sales of $192.2 million in 2004, earnings of $23.3 million, and net debt less cash of $117 million. One analyst chose to use the enterprise value of comparable companies, noting that Smith and Wollensky Restaurant Group (another chain of steak restaurants) had a ratio of enterprise value to sales of 70 percent. Another restaurant chain, Morton's, had recently gone private and, in the last year as a public company, had an enterprise ratio to sales of 80 percent.

Required - Develop an estimate of the market capitalization (market value of equity) of RCSH in August 2005 and explain your reasoning.

Reference no: EM132855547

Questions Cloud

Main differences between nsec and vector arena : -For the Breakers, what are the risks associated with transferring home games to a new facility, specifically Vector Arena? What are the risks associated with N
Determining the fair value of the asset : Discuss the process of determining the fair value of the asset acquired from VLB as prescribed by MFRS 13 Fair Value Measurement
What would the limits of rationality be for nichols : How likely would it be for Nichols to make a rational decision in the situation above? Why? What would the limits of rationality be for Nichols? Why?
Describe a situation when you were the odd man out : Describe a situation when you were the "odd man out." That is, you were the nonconformist. Did your experience resemble the Johnny Rocco study results
Develop an estimate of the market capitalization : Develop an estimate of the market capitalization (market value of equity) of RCSH in August 2005 and explain your reasoning
Write the null and alternative hypothesis : A marketing study was conducted to compare the mean age of male and female purchasers of a certain product.
How correctional institution culture can influence creation : How a correctional institution's culture (e.g., norms, unwritten rules, customs, traditions) can influence creation of ethical and potentially unethical policy
Specific attenuation for vertical-horizontal polarization : Compare the specific attenuation for vertical and horizontal polarization at a frequency of 4 GHz and a point rain rate of 8 mm/h which is exceeded for 0.01 per
What is the unearned rent revenue and rent revenue : The company recorded the cash as Unearned Rent Revenue. What is the unearned rent revenue and rent revenue

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Prepare any necessary adjusting journal entry as of december

For each transaction, prepare any necessary adjusting journal entry as of December 31 (or any other applicable date provided).

  Determine the equilibrium price and quantity

Determine the equilibrium price and quantity. Compute the elasticities for each independent variable. Note: Write down all of your calculations

  Estimating cost allocation

Alaina's customer service department follows up on customer complaints by telephone inquiry. Costs allocated to the wholesale operation under activity-based costing system should amount to what?

  What the special order would lead to

From the perspective of Jerry containers as a whole, the special order would lead to? Jerry Containers manufactures Containers for the packaging industry.

  What were the purchases made during the month

Record the allocation of overhead at the predetermined rate of $1.50 per machine hour. what were the purchases made during the month

  Is the plan devised by spencer and the cfo ethical and why

Juniper Packaging Solutions, Assume that Spencer and the controller are both firmly convinced that the new equipment will increase shareholder value.

  What is the amount of investment for decision-making purpose

What is the amount of investment for decision-making purposes? Rue Company is planning to purchase a new equipment costing P 500,000.

  Explain the concept on master budget and write in detail

Explain the concept on Master budget and write in detail. Describe a personal experience where you need to plan ahead for something important and elaborate.

  Prepare the stockholders equity section of the balance sheet

Issued a 15% stock dividend when the market price was $12.00. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018

  Compute the total cost that should have been recorded

Compute the total cost that should have been recorded in the Work in Process for Job A-1 on May 21? Round your answer to the closest whole dollar.

  What is cruises operating cash flow

What is Cruise's operating cash flow, investment in operating capital and free cash flow for 2008, respectively in millions?

  Calculate the cost per activity for each cost pool

Calculate the cost per Activity for each cost pool. Calculate the cost per unit for Basic and Advanced  products using Activity Based Costing.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd