Assignment 7
Business Valuation – Break Up Value Approach
Using the Chop – Shop approach (or Break-up Value Approach), assign a value for Cranberry Ltd whose stock is current trading at a total Market Price of € 4 million. For Cranberry Ltd, the accounting data set forth three business segments: Consumer Wholesale Retail and General Centers, Data for The Firm’s three segments are as follows –
Business Segment
Segment Sales
Segment Assets
Segment Operating Income
Wholesale
Retail
General
€ 2,25,000
€ 7,20,000
€ 25,00,000
€ 6,00,000
€ 5,00,000
€ 40,00,000
€ 75,000
€ 1,50,000
€ 7,00,000
Industry data for “Pure – Play” Firms have been compiled and are summarized as follows-
Capitalization / Sales
Capitalization / Assets
Capitalization / Operating Income
1.85
.20
1.80
0.30
0.70
0.45
7.00
3.00
2.00
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