User Account

All Pages

Estimate the appropriate price-sales multiple for longs drug

Assignment Help Finance Basics
Reference no: EM131690421

Question: Longs Drug, a large U.S. drugstore chain operating primarily in Northern California, had sales per share of $122 in 1993, on which it reported earnings per share of $2.45 and paid a dividend per share of $1.12. The company is expected to grow 6% in the long term, and has a beta of 0.90. The current T.Bond rate is 7%.

a. Estimate the appropriate price/sales multiple for Longs Drug.

b. The stock is currently trading for $34 per share. Assuming the growth rate is estimated correctly, what would the profit margin need to be to justify this price per share.

Reference no: EM131690421

Questions Cloud

Estimate the value-ebitda multiple : Time Warner is considering a sale of its publishing division. The division had earnings before interest, taxes and depreciation of $ 550 million.
Subjective analysis of the walgreen company : You have been asked to assess whether Walgreen Company, a drugstore chain, is correctly priced relative to its competitors in the drugstore industry.
Compute the reliability of the robot : Create a time series graph showing the: (1) actual data, (2) trend line for the data, and (3) deseasonalized actual data. Label the graph appropriately.
How can hr professionals overcome resistance to training : How can HR professionals overcome resistance to training
Estimate the appropriate price-sales multiple for longs drug : Longs Drug, a large U.S. drugstore chain operating primarily in Northern California, had sales per share of $122 in 1993, on which it reported earnings.
Find the average debt-equity ratio of the firms : You are trying to estimate a price per share on an initial public offering of a company involved in environmental waste disposal.
Justify the choice based on the type of protein : Justify the choice based on the type of protein you wish to express and purify - List the licenses you will need to purchase in the countries you have initially
Demonstrate your ability to research : Demonstrate your ability to research and disseminate information on a scholarly topic in the human geography discipline.
How do alexies characters identify with their past : How do Alexie's characters identify with their past? Are they always on a quest to change that past or do they feel at peace with it?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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