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Which of the following ratios would most likely be the most reliable in determining the stock price ...

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Which of the following ratios would most likely be the most reliable in determining the stock price ...

Use the table for the question(s) below.

Name

Market

Enterprise

Capitalization

Value

Price/

Value/

($ 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. Which of the following ratios would most likely be the most reliable in determining the stock price of a comparable firm?

▸ Enterprise Value/Sales

▸ Enterprise Value/EBITDA

▸ P/E

▸ Price/Book

Textbook

Fundamentals of Corporate Finance

Edition: 2^nd

Authors: Berk, DeMarzo, Harford

Read 97 times

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Thank you, thank you, thank you!

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