Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc....
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Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. (in millions) Company assumed value Equity assumed value NOPAT Net income Net nonoperating obligations (assets) Common shares outstanding Applied Materials KLA Tencor Lam Research $11,541 $13,256 $674 744 $(1,715) 158.5 $1,444 $1,377 $(1,369) 1,160.0 $9,802 $8,999 $440 $454 $803 157.9 a. Compute the price to net income ratio for both KLA Tencor Corporation and Lam Research Corporation. Round answers to two decimal places, when applicable. Price to Net income ratio KLA Tencor 26.45x Lam Research 17.41X b. Use KLA Tencor Corporation and Lam Research Corporation as comparables, along with the price to net income ratios from part a, and then estimate for Applied Materials Inc. its equity intrinsic value and its equity intrinsic value per share. Round equity intrinsic value to the nearest million. Round equity intrinsic value per share to two decimal places KLA Tencor Corporation Equity intrinsic value 3,019,131mion Equity intrinsic value per share 26.03 X
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