Use the Information for the Question(s)below

question 47

Essay

Use the information for the question(s)below.
During the most recent fiscal year,KD Industries had revenues of $400 million and earnings of $30 million.KD has filed a registration statement with the SEC for its IPO.Before it is offered,KD's investment bankers would like to estimate the value of the company using comparable companies.The investment bankers have assembled the following information based on data for other companies in the same industry that have recently gone public.In each case,the ratios are based upon the IPO price.
-Based upon the price/revenue ratio,what would be a reasonable value for KD?

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Definitions:

Anatomy

The branch of biology concerned with the study of the structure of organisms and their parts; a detailed examination of the physical structure of organisms.

Secondary Tissues

Tissues that are produced by the secondary growth of plants, including xylem and phloem, contributing to the increased thickness of stems and roots.

Agents Of Erosion

Natural forces like water, wind, ice, and gravity that physically or chemically break down and carry away Earth's surface material.

Ice

A solid state of water that occurs when it freezes, typically at or below 0°C (32°F).