Mini Case 3 Case Study Solution
Valuation Using P/E
Using the comparable companies’ data the average PE ratio has been calculated as 10.95. The company’s net income € 37.00 will be multiplied by the PE ratio to get the price of the firm. Hence, the price of WIRK Company should be € 404.97. (corporate finance institute, n.d.) (See exhibit 2)
Exhibit 2
| PE ratio | |
| Comparable companies | PE ratio |
| Wall Mart | 13 |
| Carrefour | 12.7 |
| Tesco | 9.7 |
| Ahold | 11.8 |
| Myer | 7.6 |
| DAX | 10.87 |
| WIRK | 10.95 |
| Valuation | |
| net income(MM) | € 37.00 |
| PE ratio | 10.95 |
| Price | € 404.97 |
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