Use the Information for the Question(s)below

question 25

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/earnings ratio,what would be a reasonable value for KD?

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Definitions:

Bilaterally Symmetric

A form of symmetry where an organism can be divided into two equal halves on a single plane, showing mirror-image right and left sides.

Coelom

A fluid-filled body cavity in many animals, located between the intestinal canal and body wall, lined by tissue derived from mesoderm.

Ectoderm

The outermost layer of cells or tissue of an embryo in early development, giving rise to the nervous system and skin.

Coelom

A fluid-filled body cavity found in most multicellular animals, located between the intestinal canal and the body wall, and surrounded by mesoderm tissue.