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6 Preview File Edit View Go Tools Window Help O O I la" Additional Comparabies valuation Solution (1).pdf (1 page) 0 ill ['11 E v Q Q [:1 l v ED Q Q Search firms bemg compared. D. Two rms that sell very similar products or offer very similar services will have different rs course Hem ~ + values if they are of different sizes. v 0 " V Solution: C 9 I 3. Use the table for the question below. Name Market Enterprise Enterprise Enterprise Capitalization Value Price/ Value/ Value/ ($ million) ($ million) PIE Book Sales EBITDA Gannet 6350 10,163 7.36 0.73 1.4 5.04 New York Times 2423 3472 18.09 2.64 1.10 7.21 McClatchy 675 3061 9.76 1.68 1.40 5.64 Media General 326 1192 14.89 0.39 1.31 7.65 Lee Enterprises 267 1724 6.55 0.82 1.57 6.65 Average 11.33 1.25 1.35 6.44 Maximum +60% 112% +16% +22% Minimum 40% -69% -18% -19% at Answer The table above shows the stock prices and multiples for a number of firms in the newspaper publishing industry. Another newspaper publishing firm (not shown) had sales of $620 million, EBITDA of $81 million, excess cash of $62 million, $11 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.41, what is the estimated share price if the average enterprise value/EBITDA ratio is used? n ' .. . . 1 I'rvrrrrnr" .. , .. and .u. an"... r