How much is the value of the shares

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Question - An investor was offered by an existing stockholder to purchase his shares from Sansrival Corp at Php46.00 per share. The outstanding shares of the company is 1 Million. The Year 1 revenue is Php5 Million and expected to constantly grow by 5%. The EBITDA margin remains to be stable at 50%. The required rate of return is 10%. Their outstanding loans is Php17 Million.

Required -

a. How much is the value of the shares? Are you going to accept the offer?

b. How much is the value of the stocks if there is no loans outstanding?

c. Are you going to accept the offer if the required return is 12%? Why?

Reference no: EM132986388

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