Question: The Enterprise Value / EBITDA multiple is used by investors because approximates the book value of the firm comapred to peers it changes with changes

The Enterprise Value / EBITDA multiple is used by investors because

approximates the book value of the firm comapred to peers

it changes with changes in capital structure

it can be used to approximate the acquisition value of the firm

None of these

The Enterprise Value is calculated as:

(Share price x Number of Shares Outstanding) + Total Debt

Book Equity + Total Debt

Total Cash + Total Debt

Revenue + EBITDA

The Enterprise Value / EBITDA multiple for American Greetings of 3.5 times in the case is calculated as _______________ divided by EBITDA at the end of 2011.

714

565

321

1,864

The average EV/EBITDA multiple for the peer group provided in the case (Blyth, Consolidated Graphics, CSS Industries, Deluxe, Lancaster Colony, Meredith, Scholastic) was 7.8x. Using the peer average multiple, what is the implied Enterprise Value of American Greetings at the end of 2011?

1,591

1,356

1,660

None of these

Using the industry average EV/EBITDA multiple of 7.8x, what is the implied share price for American Greetings at the end of 2011?

$41.54

$12.51

$35.41

$203.97

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Concord Clinic's directors are budgeting for administrative staff for next year. They need to plan for enough capacity to handle patients in the clinic's three practice areas: urgent care, general...

The Finances of Starting, Operating, and Growing a Small Business Author: Mark Nickerson & Julie Fitzpatrick Introduction Bill and Fiona Russell have always enjoyed craft beer, and in recent years...

Bill and Fiona Russell have always enjoyed craft beer, and in recent years have started making small batches at home. As they experimented, they mastered several niche recipes including a key lime...

hi I need those questions about the estimate of cost of capital and expansion scenario answered as soon as possible please thank you for your help -- - ---- - - -- - - -- - - - - - - - - --- --- i)...

What is the present value of the projected merger benefits in Table A as of December 31, 2015? Are the projections reasonable? How does the present value of the pre-merger operational improvements...

1. Describe the financial issue 2. What are the Development of assumptions Canadian Pacific's Bid for Norfolk Southern Formed in 1982 out of railroads that had been in existence for 100 years,...

A.Describe the financial issues B. what are the development of assumptions C.Explain decision criteria/evidence and presentation of financial analysis D. Explain the recommendation with expected...

Please advise if you can answer all the questions in attached questionnaire as per the attachedcase of IVEY PUBLISHING: 9B14N013. (HUDBAY MINERALS: ACQUISITION OF NORSEMONT MINING. If answering all...

hi I need those questions about the estimate of the cost of capital and expansion scenario answered please thank you for your help Enable Editing PROTECTED VIEW Be careful-files from the Internet can...

1) Please provide Susan Chandler?s analysis result or report particularly to the impact of leveraged recapitalization on; a) Share Value b) Debt Rating c) Cost of Capital d) Reported Earnings Per...

Executive Memorandum (EM) Guidelines Prepare an executive summary of the papers that is only one page long.The assignment should be typed in Word, font size 11 double spaced, with minimum margins of...

21 varieties of Sunshine Brands' product "Cheez-its" are in the USDA's nutrition information database, from Asiago Crackers to White Cheddar Snack Mix. The amount of sodium in a pack of these...

If the graphs of the functions f (x) = |r 20 + +a| and g (x) = 3x? 36 + k are symmetrical about same straight line for all k e R, then the value of must be Backspace 78 9 4 5 6 1 2 3

a stock had a return of 8 . 1 percent last year. if the inflation rate was 1 . 9 percent what was the appropriate real return

Which of the following are problems with identifying users of ABC? Multiple select question. ABC means different things to different organizations. Organizations will announce the discontinuance of...

9. Are you able to integrate your presentation aids into your presentation effectively?

4. Are you articulating well? Are you mumbling? Can other people understand your words?

6. Are you effectively scanning as you rehearse? (If you have others present, are you making eye contact? If not, are you looking at different quadrants of the room you are rehearsing in?)