Assume the subject company is Campbell Soup Company and your job is to value the

Question

Assume the subject company is Campbell Soup Company and your job is to value the firm's stock using the market method. I have provided guideline public company information below. Compute the stock price of Campbell Soup using the Trailing Price to earnings multiple.

Ticker Company Industry Market Cap Trailing P/E P/B Dividend yield Debt/Eq Price MVIC / EBITDA CPB Campbell Soup Company Processed & Packaged Goods 12.73B 35.06 9.02 3.33% 7.01 42.2 GIS General Mills, Inc. Processed & Packaged Goods 27.43B 17.19 4.51 4.15% 2.58 47.2          16.68 K Kellogg Company Processed & Packaged Goods 25.55B 14.49 9.00 3.04% 3.2 73.9          14.40 MKC McCormick & Company, Inc. Processed & Packaged Goods 16.29B 31.26 5.48 1.65% 1.7 127          24.91 SJM The J. M. Smucker Company Processed & Packaged Goods 12.78B 22.88 1.64 2.97% 0.61 115          15.47 Book Value Equity (Millions) Campbell Soup Company     1,373.00 EPS Campbell Soup Company             0.86 DPS Campbell Soup Company             1.40 EBITDA (Millions) Campbell Soup Company        925.00 Market Value Liabilities (Millions) Campbell Soup Company 14,892.00 Shares Outstanding (Millions) Campbell Soup Company        300.65

Explanation / Answer

Earnings per share of Campbell=0.86

Average P/E of idnustry=(17.19+14.49+31.26+22.88)/4=21.455

Price of Campbell Share=EPS*P/E=0.86*21.455=18.4513

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