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Author Question: The Highlight Company has a book value of $56.50 per share, and is currently trading at a price of ... (Read 185 times)

Triley39

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Question 1

NRBG Inc. generated EBITDA of $181,818,182 million this year and that is expected to grow by 10% over the coming year.  NRBG has 40 million shares outstanding; similar companies trade around 9 times cash flow.  What are NRBG's expected cash flow and price per share?
◦ $4.55, $40.91
◦ $5.00, $45.00
◦ $5.00, $40.91
◦ $4.55, $45.00

Question 2

The Highlight Company has a book value of $56.50 per share, and is currently trading at a price of $59.00 per share. You are interested in investing in Highlight, and have just used a present-value based stock valuation model to calculate a present (intrinsic) value of $55.00 per share for Highlight's stock. Assuming that your calculations are correct you should
◦ buy the stock, because the current market price per share is higher than the present value.
◦ buy the stock, because the book value per share is greater than the present value.
◦ not buy the stock, because the present value is less than the market price per share.
◦ buy the stock, because the book value and the current trading price are very close to one another in value.


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Marked as best answer by Triley39 on Mar 29, 2022

Talvinder.Singh

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Triley39

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Reply 2 on: Mar 29, 2022
:D TYSM


alexanderhamilton

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Reply 3 on: Yesterday
Gracias!

 

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