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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
World Wide Web Wares (4W, for short) is an online retailer of small kitchen appliances and utensils. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year, albeit a fairly small one. After doing some basic research on the company, you’ve decided to take a closer look. You plan to use the price/sales ratio to value the share, and you have collected P/S multiples on the following Internet retailer shares:

Find the average P/S ratio for these three firms. Given that 4W is expected to generate $40 million in sales next year, and will have 10 million shares outstanding, use the average P/S ratio you computed above to put a value on 4W’s share.
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