QUIZ 6

MARKET VALUE APPROACH

I. TRUE OR FALSE

1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. TRUE
6. TRUE
7. FALSE
8. TRUE
9. FALSE
10. TRUE
11. TRUE
12. TRUE
13. TRUE
14. TRUE
15. TRUE
16. TRUE
17. TRUE
18. TRUE
19. TRUE
20. TRUE
21. FALSE
22. TRUE
23. FALSE
24. TRUE
25. TRUE
26. TRUE
27. FALSE
28. FALSE
29. TRUE
30. TRUE

II. MULTIPLE CHOICE THEORY

1. A
2. D
3. B
4. D
5. A
6. A
7. B
8. C
9. D
10. B
11. D
12. C
13. C.
14. C.
15. A
16. C
17. A
18. B
19. D
20. D

III. MULTIPLE CHOICE PROBLEM

1. A
2. B
3. A
4. D
5. A.

6. B
7. B
8. C
9. B
10. C.
11. A
12. C
13. D
14. A
15. C

IV. PROBLEM SOLVING

P6-1
MARKET VALUE PER P:E RATIO
SHARE
1 27.500 = 27.500/5.50
= P5.00
2 30.250 30.350/5.50
=P5.50
3 22.000 22.000/5.50
=P4.00
4 17.875 17.875/5.50
P3.25
5 28.875 28.875/5.50
=P5.25

P6-2
P/E Ratio = Market Value per Share ÷ Earnings per Share
= 122 ÷ 25
P /E Ratio= 4.88 or 5
LMVL Co. P/E Ratio × LVVL Co. Earnings per Share
5 × Php 10.00
The investor value of Php 50.00
P6-3
A. 9.3
B. 7.50
C. 6.75
D. 8
TOTAL 31.55 x 1.25 = 39.44

P6-4
Market Value of share = Php45
Dividend = Php 2

Therefore, Dividend yield = Dividend/Market Value of share

    = 2//45
Dividend yield = 4.44 or 4.44%
P6-5
Book value per share = Total equity / No. of shares outstanding
= Php 300 million / 10 million
= Php 30 per share
Book to market ratio = Book value per share/ Market value per share
= Php 30 per share / Php 37 per share
= 0.81

Market value of Lumina = Book to market ratio x Equity

= 1.2 x Php 300 million
= Php 360 million

P6-6
A, How much is the EBITDA of Ancient Times for the Period?
EBITDA = Net Income + Interest + Depreciation 225 + 75 + 50 = 350
B. How much is the market Value of Ancient Times?
B. 350 x 2.75 = 962.5
C. If the owners is willing to sell 50% of the ownership at Php500 Million, are you
going to buy the company’s stake?
Based on the computation it will be not.
C. 962.5 x 50% = 481.25 - 500 = - 18.75