If the market leader in an industry has a $300 million market value and a 30% market share, the market is valuing each percentage point of market share at $10 million. If a target company in the same industry has a 20% market share, the market value of the target company is $200 million.

Question

Quizplus · Accepted Answer

The market values each percentage point of market share at $10 million (derived from the market leader's valuation). Therefore, a company with a 20% market share would be valued at 20 x $10 million = $200 million.

If the Market Leader in an Industry Has a $300