A GP management company has decided to go public. Next year’s P/DEratio is accepted by the market as the valuation framework by which to value the GP management company. Next year’s P/DE for the company is $5.00 per share. Assuming a simplified bi-furcated multiples approach, if the management fee earnings compose 20% of DE, the rest of DE comes from performance earnings and management fee earnings are valued at 12x P/DE, at what multiple must performance fee earnings be valued at to justify a $30.00 per share IPO price? Business Accounting BUSI 517
