Value of your firm equity using relative valuation

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Reference no: EM131930269

1. FedEx Corporation stock ended the previous year at $103.39 per share. It paid a $0.35 per share dividend last year it ended last year at $106.69. If you owed 200 shares of FedEx what was your dollar return and percent return?

2. What monitoring problem is RPE intended to solve? Explain the intuition behind how RPE works to solve this problem.

3. Suppose your firm has an EBITDA of $9 million and $42.9 million in debt. If a similar, publicly traded firm has equity worth $156.3 million, debt worth $94.7 million, and an EBITDA of $15.4 million, find the value of your firm's equity using a relative valuation. Assume neither firm has a significant amount of cash on hand, write your answer in millions, and include two decimal points (e.g., 3.21 for $3.21 million).

Reference no: EM131930269

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