Using only information from AirTran, Frontier, Ryanair, Southwest and Westjet, please perform a price-earnings multiples valuation and a EBIT Multiples valuation for both trailing and leading for JetBlue. Show all steps. Find Jetblue's trailing and leading price/per share under both methods.

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Exhibit 7 JetBlue Airways IPO Valuation Recent Valuation Multiples Actual for 2001 Estimates for 2002 Price/ Share Book Equity/ Book Debt/ EBITDA*/ EBIT/ Earnings/ EBIT/ Share Share Share Share Share Share Earnings/ Share (2) (4) (5) (6) (7) (8) AirTran 6.6 0.5 4.0 1.2 0.8 0.3 0.8 0.3 Alaska Air 29.1 32.1 33.8 3.3 (1.7) (1.5) 2.7 (0.8) America West 3.5 12.5 10.2 (4.3) (6.2) (4.4) (4.5) (4.1) AMR 22.3 35.1 69.3 (7.0) (16.2) (11.5) 12.4 (3.9) 15.0 10.8 32.9 8.5 (2.0) (2.6) (6.4) (7.2) Continental 26.2 20.9 82.0 9.8 1.4 (1.6) 11.1 (1.2) Delta 29.3 32.7 70.3 (1.4) (11.8) (9.9) 8.4 (3.1) Frontier 17.0 5.4 0.0 3.2 3.0 2.0 0.6 0.4 Midwest 14.6 8.3 2.7 (0.1) (1.6) (1.1) 1.6 0.8 Northwest 15.7 (5.1) 66.9 1.6 (4.4) (5.0) 7.2 (2.5) Ryanair 32.1 5.5 3.3 1.3. 0.9 0.7 1.2 0.9 Southwest 18.5 5.3 1.8 1.5 1.1 0.7 1.4 0.7 United 13.5 59.6 186.2 (37.0) (56.1) (39.6) N/A (15.4) WestJet 15.9 2.8 1.0 2.1 1.3 0.8 1.6 0.6 Trailing Leading Market to book multiple Total capital multiple EBITDA EBIT PE EBIT PE multiple multiple Multiple multiple Multiple [(1+3)/(2+3) [1/2] ] [(1+3)/4] [(1+3)/5] [1/6] [(1+3)/7] [1/8] AirTran 13.5 2.4 8.6 13.0 25.3 13.9 20.0 Alaska Air 0.9 1.0 19.2 (37.1) (19.3) 23.3 (38.8) America West 0.3 0.6 (3.2) (2.2) (0.8) (3.0) (0.8) AMR 0.6 0.9 (13.1) (5.7) (1.9) 7.4 (5.7) 1.4 1.1 5.6 (23.8) (5.7) (7.5) (2.1) Continental 1.3 1.1 11.0 77.0 (16.7) 9.8 (22.4) Delta 0.9 1.0 (71.6) (8.4) (3.0) 11.8 (9.4) Frontier 3.2 3.2 5.3 5.7 8.4 26.6 45.9 Midwest 1.8 1.6 (298.3) (11.0) (13.5) 11.2 17.4 Northwest (3.1) 1.3 51.6 (18.8) (3.1) 11.5 (6.3) Ryanair 5.8 4.0 26.4 38.5 44.0 30.3 34.1 Southwest 3.5 2.9 13.4 18.6 27.6 14.3 28.4 United 0.2 0.8 (5.4) (3.6) (0.3) N/A (0.9) WestJet 5.6 4.4 8.1 12.7 19.6 10.6 26.9 Exhibit 7 JetBlue Airways IPO Valuation Recent Valuation Multiples Actual for 2001 Estimates for 2002 Price/ Share Book Equity/ Book Debt/ EBITDA*/ EBIT/ Earnings/ EBIT/ Share Share Share Share Share Share Earnings/ Share (2) (4) (5) (6) (7) (8) AirTran 6.6 0.5 4.0 1.2 0.8 0.3 0.8 0.3 Alaska Air 29.1 32.1 33.8 3.3 (1.7) (1.5) 2.7 (0.8) America West 3.5 12.5 10.2 (4.3) (6.2) (4.4) (4.5) (4.1) AMR 22.3 35.1 69.3 (7.0) (16.2) (11.5) 12.4 (3.9) 15.0 10.8 32.9 8.5 (2.0) (2.6) (6.4) (7.2) Continental 26.2 20.9 82.0 9.8 1.4 (1.6) 11.1 (1.2) Delta 29.3 32.7 70.3 (1.4) (11.8) (9.9) 8.4 (3.1) Frontier 17.0 5.4 0.0 3.2 3.0 2.0 0.6 0.4 Midwest 14.6 8.3 2.7 (0.1) (1.6) (1.1) 1.6 0.8 Northwest 15.7 (5.1) 66.9 1.6 (4.4) (5.0) 7.2 (2.5) Ryanair 32.1 5.5 3.3 1.3. 0.9 0.7 1.2 0.9 Southwest 18.5 5.3 1.8 1.5 1.1 0.7 1.4 0.7 United 13.5 59.6 186.2 (37.0) (56.1) (39.6) N/A (15.4) WestJet 15.9 2.8 1.0 2.1 1.3 0.8 1.6 0.6 Trailing Leading Market to book multiple Total capital multiple EBITDA EBIT PE EBIT PE multiple multiple Multiple multiple Multiple [(1+3)/(2+3) [1/2] ] [(1+3)/4] [(1+3)/5] [1/6] [(1+3)/7] [1/8] AirTran 13.5 2.4 8.6 13.0 25.3 13.9 20.0 Alaska Air 0.9 1.0 19.2 (37.1) (19.3) 23.3 (38.8) America West 0.3 0.6 (3.2) (2.2) (0.8) (3.0) (0.8) AMR 0.6 0.9 (13.1) (5.7) (1.9) 7.4 (5.7) 1.4 1.1 5.6 (23.8) (5.7) (7.5) (2.1) Continental 1.3 1.1 11.0 77.0 (16.7) 9.8 (22.4) Delta 0.9 1.0 (71.6) (8.4) (3.0) 11.8 (9.4) Frontier 3.2 3.2 5.3 5.7 8.4 26.6 45.9 Midwest 1.8 1.6 (298.3) (11.0) (13.5) 11.2 17.4 Northwest (3.1) 1.3 51.6 (18.8) (3.1) 11.5 (6.3) Ryanair 5.8 4.0 26.4 38.5 44.0 30.3 34.1 Southwest 3.5 2.9 13.4 18.6 27.6 14.3 28.4 United 0.2 0.8 (5.4) (3.6) (0.3) N/A (0.9) WestJet 5.6 4.4 8.1 12.7 19.6 10.6 26.9

Answer rating: 100% (QA)

First lets find the necessary financial metrics for JetBlue Airways Unfortunately the table does not provide specific numbers for JetBlue however we c... View the full answer