7. Of course, you also know about the multiples-based valuation method. You would like to use this method to verify if your conclusion regarding the overvaluation or undervaluation of XYZ is correct.
On the stock exchange, companies that are comparable to XYZ (including in terms of financing structure (i.e. relative debt level)) currently have a Price/Earnings ratio of 9. XYZ’s current earnings are 400 million USD and it (still) has 100 million shares outstanding.
Based only on the information provided in this question, what is your estimate of the price of a share of XYZ in USD?
For example, if your answer is 17 USD, then type in “17”.
Enter answer here