Multiples method of estimating value

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Assume your firm is attempting to purchase a private brewer of fine craft beers called PBCB. It is early in the investigation so you do not have PBCB's financials, but PBCB has reported the number of kegs of beer it made last year (4 million). A similar publicly listed brewer of fine craft beers, AJAX, also reports its revenues ($10 billion) and number of kegs of beer produced (40 million); AJAX's share price is $20/share and there are 100 million shares outstanding (market value = $ 2 billion). What does the multiples method of estimating value say your firm should offer for PBCB? Explain your answer and show your calculations.

Reference no: EM132622510

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