User Account

All Pages

Main operating divisions in paper products and biotechnology

Assignment Help Finance Basics
Reference no: EM133075642

Interco is a publicly traded firm with two main operating divisions in paper products and biotechnology. The paper division generates EBIT of $12M per year and biotech generates EBIT of $3M. Interco's shares currently trade at $10 per share, with 10M shares outstanding. Interco's CEO, Shelly, is concerned that Interco is undervalued. Comparable publicly-traded paper products firms are trading at an EV/EBIT multiple of 6. Comparable publicly-traded biotechnology firms are trading at an EV/EBIT multiple of 20. a) Assume the comparables yield insight into the true, fundamental value of Interco's operating divisions. By how much is Interco undervalued (in $)?

Reference no: EM133075642

Questions Cloud

Determine the company earnings per share on common stock : A company reports the following: Net income $214,000 and Preferred dividends $12,000. Determine the company earnings per share on common stock
How much would you expect to receive today : How much would you expect to receive today in exchange for your rights to continue receiving payments under the settlement?
Entry-level brand management position : Coca-Cola Company is considering you for an entry-level brand management position.
Construct a risk-free hedge portfolio : (1) If you buy a British bond, how many calls do you have to buy or sell to construct a risk-free hedge portfolio? What is the future dollar value of the hedge
Main operating divisions in paper products and biotechnology : Interco is a publicly traded firm with two main operating divisions in paper products and biotechnology. The paper division generates EBIT of $12M per year and
How much can Nelson short-term debt increase : The Nelson Company has $1,650,000 in current assets and $550,000 in current liabilities. How much can Nelson's short-term debt increase
Discuss principal indicators of healthy company : Briefly discuss 5 principal indicators (financial and operational) of a healthy company? What are 5 indicators that a company may be in poor financial health?
Percentage of the company capital structure : Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 11%, and its common stock currently pays a $2.00 divide
Analyze property for possible acquisition-syndication : You have just received (late 1993) the attached setup from a local broker for the purchase of a commercial warehouse facility in the City of Commerce, a city ea

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd