Reference no: EM133048700
Question - Zubaru Investment Bank is working with the management of Bodega, Inc., a supermarket chain, in order to take the company public in an initial public offering. Selected financial information for Bodega, Inc. is as follows.
Long-term debt (8% interest rate) P10,000,000
Common equity:
Par value (P1 per share) 3,000,000
Additional paid-in-capital 24,000,000
Retained earnings 6,000,000
Total assets 43,000,000
Net income 3,750,000
Dividend (annual) 1,500,000
If public companies in the business of groceries are trading at a market to book ratio of 3x; those in the airline industry are trading at a market to book ratio of 4x, those in banking are trading at a market to book ratio of 2x, what is the estimated value per share of Bodega, Inc.?