What is the range of possible values for pacificorp

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Since PacifiCorp had been privately owned by its parent corporation (Scottish Power PLC), there was no objective value for it as there would be for publicly-traded shares. In this situation, a popular method to value a firm is to use industry multiples as benchmarks. In other words, if the publicly-traded firms in an industry have an average Market-Value-to-Book-Value ratio of 1.5 and the subject private firm has a book value of $4 billion, its “intrinsic” market value could be estimated at 1.5 × $4 billion = $6 billion. Based on the multiples for comparable regulated utilities (presented in Exhibit 10), and the fundamentals for PacifiCorp, what is the range of possible values for PacifiCorp? What questions might you have about this range?

Reference no: EM131453493

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