Let's suppose we want to value company ABC using the comparable companies method based on...

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Accounting

image Let's suppose we want to value company ABC using the comparable companies method based on the Price/Earnings (P/E) multiple. We have identified five comparable companies that are publicly traded and operate in the same industry. Below is the relevant financial information for each company: Assume that the earnings per share for company ABC is $4 per share. a) Use the comparable companies method to estimate the value of company ABC based on the average P/E ratio. b) Using the same information from the previous exercise, estimate the company's value through the minimum, maximum, median, and weighted average (using the weights provided in the table above)

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