Use the EV/EBIT multiple of the e-commerce company Salando to estimate the share price of the company About me. Please assume that the book value of debt is equal to the market value of debt.What is the share price of About me closest to?

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BlackTom AI · Accepted Answer

The provided item appears to be incomplete for a detailed option-by-option analysis. Specifically, the question asks to use the EV/EBIT multiple of Salando to estimate the share price of a company named About me, with the assumption that book value of debt equals market value of debt, and then asks for the share price closest to a value. However, the input lacks the list of answer options to evaluate, and it also does not provide the key financial data needed to perform the calculation (such as Salando's EV/EBIT multiple, About me's EBIT, About me's debt, and About me's number of shares outstanding).

Here is how I would approach the problem once the necessary data are available:

- Step 1: Gather inputs
  - Obtain Salando’s EV/EBIT multiple from a recent period (e.g., trailing twelve months or forward 12 months).
  - Obtain About me’s EBIT (or project the EBIT) for the same period used for Salando’s multiple.
  - Determine About me’s debt (preferably market value, but the problem states to assume book value equals market value), and obtain About me’s number of shares outstanding.
  - Compute About me’s enterprise value (EV) as: EV = EBIT × (Salando’s EV/EBIT multiple).
  - Convert EV to equity value by subtracting net debt: Equity Value = EV − Debt, where Debt is the market/book value of debt as given (and since book value equals market value per the assumption, use that).
  - Finally, derive the share price: Share Price = Equity Value / Shares Outstanding.

- Step 2: Apply the arithmetic
  - If the computed Share Price is close to one of the options (for example, 64.47 EUR as indicated in the provided answer field), you would select the closest option by absolute difference.
  - If a negative or implausible result arises, verify data consistency (units, whether EBIT is in the same currency and time frame, whether EV should be adjusted for cash and non-operating items, and whether the debt figure aligns with market value).

- Step 3: Common pitfalls and clarifications
  - Using an EV/EBIT multiple from a different business model or geographic region without reconciliation may distort the result.
  - Misaligning the EBIT period with the chosen EV/EBIT multiple (e.g., using forward EBIT with a trailing multiple) can bias the price.
  - If About me has excess cash, it should typically be added to equity value (or adjust EV accordingly), unless the problem’s framework specifies to include cash in EV as part of enterprise value.
  - Ensure consistency in currency units and that the number of shares corresponds to About me’s current share count.

- Step 4: Interpreting the given answer tag
  - The provided answer field shows a single option: 'D. 64.47 EUR'. Without the full list of options or the underlying data, I cannot verify why this would be the closest estimate, nor can I compare it to other possible choices.

In summary, to deliver a precise, option-by-option reasoning, I need the complete set of answer choices and the relevant financial figures (Salando’s EV/EBIT, About me’s EBIT, About me’s debt, and shares outstanding). If you can provide the missing options and the numerical inputs, I will compute the share price step by step and explain why each option is correct or incorrect with clear rationale.

Use the EV/EBIT multiple of the e-commerce company Salando to estimate the share price of the company About me. Please assume that the book value of debt is equal to the market value of debt.What is the share price of About me closest to?

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