I saw this on an old forum and I'm struggling to solve it:
Company has P/E of 20x, Revenue of 2,000, Gross Margin 50%, SG&A of 500, Debt of 1000, Interest rate of 10%, Tax rate of 25%, 100 Shares Outstanding. What is the current share price?
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Rev: 2000 Gross: 1000 EBIT: 500 EBT: 400 NI: 300
Equity Value: 6000
Price = 60
Rev. 2,000 Less GM (50%) (1,000) Gross Profit 1,000 Less SG&A (500) Less Interst Exp. (100) [1,000*10%] EBT 400 Less Taxes (25%) (100) Earnings 300
Price = 300*20 = 6,000/100shares = $60
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