Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. • AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. • Is Amazon underpriced or overpriced compared to its peers?
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Question 10:
• Problem
• Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion.
• AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers.
• Is Amazon underpriced or overpriced compared to its peers?
Step by step
Solved in 2 steps
- Problem Amazon Co, Inc (AMZN) has an Enterprise Value of $18.7 billion. AMZN’s Enterprise Value to Sales ratio is 0.40 versus 1.65 for peers, while their Enterprise Value to EBITDA ratio is 6.5 versus 15.7 for peers. How would AMZN’s Enterprise Value change if the ratios were equal to the average of its peers? Please answer fast.Problem 5 (DuPont and ROE) A firm has a profit margin of 2% and an equity multiplier of 2.0. Its sales are P100 million, and it has total assets of P50 million. What is its ROE?Problem 9 (Ratio Calculations) Giselle Company has P12 billion in assets, and its tax rate is 40%. Its basic earning power (BEP) ratio is 15%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?
- Problem 6 (DuPont and Net Income) Mindanao Mining has P6 million in sales; its ROE is 12%, and its total assets. turnover is 3.2 x. The company is 50% equity financed, and it has no preferred stock outstanding. What is its net income?Kk.1. Williamson Industries has $6 billion in sales and $1.709 billion in fixed assets. Currently, the company's fixed assets are operating at 95% of capacity. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Enter your answer in billions of dollars. Round your answer to five decimal places. $ billion What is Williamson's target fixed assets/sales ratio? Do not round intermediate calculations. Round your answer to two decimal places. % If Williamson's sales increase 14%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Enter your answer in billions of dollars. Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to five decimal places. $ billionQ7 Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 1,500,000 $ 1,000,000 Operating Income $ 600,000 $ 450,000 Investment $ 4,000,000 $ 2,750,000 If both divisions were presented with an opportunity to invest in a project that is estimated to achieve an ROI of 15%, what will the units likely decide? Multiple Choice Division P will not invest; Division Q will invest. Division P will invest; Division Q will not invest. Neither unit will invest in the projects. Division P will be indifferent; Division Q will not invest. Division P will invest; Division Q will be indifferent.
- 14.EXCEL] Capital intensity ratio: For McDonald Metal Works in Problem 13, how much must net sales grow if the capital intensity ratio has to drop to 60 percent? State your answer as both a percent of sales and a dollar sales increase. 13. EXCEL] Capital intensity ratio: McDonald Metal Works has been able to generate net sales of $13,445,196 on assets of $9,145,633. What is the firm's capital intensity ratio?14. [EXCEL] Capital intensity ratio: For McDonald Metal Works in Problem 13, how much must net sales grow if the capital intensity ratio has to drop to 60 percent? State your answer as both a percent of sales and a dollar sales increase. Please use excel. 13. [EXCEL] Capital intensity ratio: McDonald Metal Works has been able to generate net sales of $13,445,196 on assets of $9,145,633. What is the firm's capital intensity ratio? Please use excel.A5 7j Q Corporation and R Inc. are two companies with very similar characteristics. The only difference between the two companies is that Q Corporation is an unlevered firm, and R Inc. is a levered firm with debt of $3.5 million and cost of debt of 10%. Both companies have earnings before interest and taxes (EBIT) of $1.5 million and a marginal corporate tax rate of 35%. Q Corporation has a cost of capital of 15%. j. Both companies are now evaluating a project that requires an initial investment of $1.15 million, that will yield after tax cash inflows of $500,000 per year for the next three years. Assume that this project has the same risk level as each individual firm’s assets. Should Q Corporation invest in this project? Should R Inc. invest in this project?
- J 8, The Time Teller Ltd has a net profit margin of 10,5%, total asset turnover of 1,75 and return on equity (ROE) of 24,50%. What is this company's financial leverage multiplier?12.EXCEL] Capital intensity ratio: Tantrix Confectioners has total assets of $3,257,845 and net sales of $5,123,951. What is the firm's capital intensity ratio?Question#01 The Rogers Company is currently in this situation: Sales = 14 million; Variable Cost = 7 million Fixed Cost = 3 million tax rate, T = 35%; value of debt, D = $2 million; k d = 10%; ks = 15%; and Shares of stock outstanding, n = 600,000. The firm’s market is stable, and it expects no growth, so all earnings are paid out as dividends. The debt consists of perpetual bonds. What is the total market value of the firm’s stock, S, its price per share, P0, and the firm’s total market value, V? What is the firm’s weighted average cost of capital? The firm can increase its debt by $8 million, to a total of $10 million, using the new debt to buy back and retire some of its shares. Its interest rate on all debt will be 12 percent (it will have to call and refund the old debt), and its cost of equity will rise from 15 to 17 percent. EBIT will remain constant. Should the firm change its capital structure? Calculate the Break-even point of the company.