Topic > Jetblue Case Study Solution - 732

Using the P/E multiple method is suitable for valuing company shares, however this method does not have the same quality as the DCF model, when we distinguish between other companies. Although we don't get the exact results when we have multiple companies in the same field. The dividend growth model is not relevant for this company because the company has not disclosed its dividend in the stock market. Additionally, the company wants its earnings to fund its growth. Therefore, it is difficult to use this method because we do not have any information about the dividend. Since the DCF model is more appropriate to use, it also gives us the best picture of the relevant companies in terms of intrinsic share value. Furthermore, we calculated the WACC to be 9.98%, after which we used DCF analysis. In our analysis we assumed that the share will be 20.5 per share. This tells us that the management price was overvalued for the IPO and the price was 25 -26. This will put pressure on management because the price was higher than we had estimated, it would cause future sales of the company and put investors in an embarrassing situation. Therefore, they should recommend the price range of 20 to