What would be a reasonable value for kd

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During the most recent fiscal year, KD Industries had revenues of $400 million and earnings of $30 million. KD has filed a registration statement with the SEC for its IPO. Before it is offered, KD's investment bankers would like to estimate the value of the company using comparable companies. The investment bankers have assembled the following information based on data for other companies in the same industry that have recently gone public. In each case, the ratios are based upon the IPO price.

Comparable Company Price/Earnings Price/Revenues

Eenie 12.4 1.6
Meenie 14.6 1.4
Minie 16.2 1.2
Moe 20.4 0.8

a. Based upon the price/revenue ratio, what would be a reasonable value for KD?

b. Based upon the price/earnings ratio, what would be a reasonable value for KD?

Reference no: EM132796592

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