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:

Psychoanalysis

A set of theories and therapeutic techniques related to the study of the unconscious mind, which together form a method of treatment for mental disorders, developed by Sigmund Freud.

Sigmund Freud

A neurologist from Austria who established psychoanalysis, a therapeutic approach that addresses mental disorders by facilitating conversations between a psychoanalyst and the patient.

Alfred Adler

An Austrian medical doctor and psychotherapist known for founding the school of individual psychology, which emphasizes the uniqueness of the individual and the role of societal factors in shaping personality.

Insight Therapies

Psychological treatments that involve verbal interactions intended to enhance clients' self-knowledge and thus promote healthful changes in personality and behavior.