After researching the competitors of EJH Enterprises, you determine that most comparable firms have the following valuation ratios: Comp 1 Comp 2 Comp 3 Comp 4 EV/EBITDA 12 11 12.5 10 P/E 19 18 20 17 EJH Enterprises has EPS of $1.80, EBITDA of $295 million, $25 million in cash, $40 million in debt, and 104 million shares outstanding. What range of prices is consistent with both sets of multiples?
The range consistent with both sets would be $34.00 to $37.40. This includes the smallest value that is within both the P/E and EV/EBITDA ranges ($34) and the highest value within both ranges ($37.40)
