Posted: March 6th, 2017
How many shares would you issue and at what price would you offer Teabuck s ? Discuss if you would use traditional method of issuing the IPO or the Internet to issue the IPO as Google did. Discuss the pros and cons in each case. Information on Teabucks below. Valuation using P/E, Price/Sales, and Price/Cash Flow Ratio: Teabucks Income statement (in $Million and rounded to nearest million) Total Revenue 750 Costs of goods sold 575 Gross profit 175 Selling and Administrative expenses 40 Depreciation / Amortization 45 Other expenses 25 Income before taxes (EBIT) 65 Taxes (38%) 25 Net Income 40 Industry Average Starbucks P/E Ratio 35 52 Price / Sales Ratio 2.0 3.75 Price / cash Flow 20 28
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