SRD Corporation's stock is currently selling at $36 per share. SRD reported total revenues of $5.26 billion over the past year, has a book value of equity of $2.9 billion, and has 296 million shares outstanding. Based on comparable firms, the appropriate P/S and P/B for SRD are 2.85 and 4.75, respectively.
A. What is the stock's approximate intrinsic value based on the P/S multiplier?
B. What is the stock’s approximate intrinsic value based on the P/B multiplier?

Question

SRD Corporation's stock is currently selling at $36 per share. SRD reported total revenues of $5.26 billion over the past year, has a book value of equity of $2.9 billion, and has 296 million shares outstanding. Based on comparable firms, the appropriate P/S and P/B for SRD are 2.85 and 4.75, respectively. 
A. What is the stock's approximate intrinsic value based on the P/S multiplier?
B. What is the stock’s approximate intrinsic value based on the P/B multiplier?

Quizplus · Accepted Answer

The Answer of SRD Corporation's stock is currently selling at $36 per share. SRD reported total revenues of $5.26 billion over the past year, has a book value of equity of $2.9 billion, and has 296 million shares outstanding. Based on comparable firms, the appropriate P/S and P/B for SRD are 2.85 and 4.75, respectively. 
A. What is the stock's approximate intrinsic value based on the P/S multiplier?
B. What is the stock’s approximate intrinsic value based on the P/B multiplier?

SRD Corporation's Stock Is Currently Selling at $36 Per Share