Biology Forums - Study Force

Use the table for the question(s) below.

Name

Market

Enterprise

Enterprise

Enterprise

Capitalization

Value

Price/

Value/

Value/

($ million)

($ million)

P/E

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%

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 $84 million, excess cash of $66 million, $14 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.48, what is the difference between the estimated share price of this firm if the average price-earnings ratio is used and the estimated share price if the average enterprise value/EBITDA ratio is used?

▸ $0.49

▸ $5.43

▸ $4.94

▸ $0.34

$0.49