1. Company X is in the household goods industry. The stocks of companies in that industry have consistently had P/E ratios that have averaged 8.4. Company X most recently reported net income of $42,000 and there were 55,500 shares of common stock outstanding. What would the estimated value of Company X stock using this information?
2. A firm’s EV / EBITDA ratio has historically been 7.4 with little variation. It’s current EBITDA is $680. If the firm currently has $1,900 in debt, $400 cash, and 135shares of stock outstanding, what would be the ‘intrinsic value’ of a share of its stockusing this information?