What should be the average stock price per share

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Reference no: EM131157479

Your company produced the following "reported" income statements during 2014-2015 period. You have recently completed a comparable company analysis and figured out that the applicable, average Mcap/LTM Net Income multiple for your company is 7.5x. Based on your comparable company analysis, what should be the average stock price per share if you plan to sell your company? (Show your work!)

Reported Income Statement
	2014:Q3	2014:Q4	2015:Q3
Sales	3,500	4100	3600
COGS	2,200	29⁷5	3000
Other Income	50	90	0
SG&A	675	700	120
Restructuring Charge	0	20	0
EBIT	675	545	480
Interest Expense	75	102	73
Pre-tax Income	600	443	407
Income Tax (38%)	228	168.34	154.66
Net Income	372	275	252

Additional Notes:

• In 2015:Q2, your company recorded a $100 mil. pre-tax inventory write-off due to fire in the company's warehouse.
• In 2014:Q3, your company realized a $50 mil. pre-tax gain ("other income") on the sale of a non-core business.
• In 2014:Q4, your company additionally realized a $40 mil. pre-tax gain ("other income") on the sale of a non-core business.
• In 2014:Q4, your company recognized a $20 mil. pre-tax restructuring costs in connection with a downsizing strategy.
• Your company has 125 mil. basic outstanding shares, with current stock price of $45 per share. The company has the following information about the options/warrants:

Options/warrants Tranche	Number of Shares (miL)	Exercise Price
Tranche 1	10.00	$ 5.00
Tranche 2	7.50	$ 25.00
Tranche 3	5.00	$ 30.00
Tranche 4	2.50	$ 35.00
Tranche 5	1.00	$ 40.00
Tranche 6	0.50	$ 55.00

Reference no: EM131157479

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