Use the table for the question(s) below. Name Gannet New York Times McClatchy Media General Lee Enterprises Average Maximum Minimum Market Capitalization ($ Value million) 6350 2423 675 326 267 Enterprise OA. $3.17 OB. $0.32 C. $0.19 D. $3.49 ($ million) 10,163 Price/ Enterprise Value/ Enterprise Value/ P/E Book 7.36 0.73 18.09 2.64 9.76 1.68 0.39 6.55 0.82 11.33 1.25 +60% 112% 40% -69% 3472 3061 1192 14.89 1724 Sales 1.4 1.10 1.40 1.31 1.57 1.35 +16% 18% EBITDA 5.04 7.21 5.64 7.65 6.65 6.44 +22% 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 $80 million, excess cash of $60 million, $15 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.44, 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?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business
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Use the table for the question(s) below.
Name
Gannet
New York Times
McClatchy
Media General
Lee Enterprises
Average
Maximum
Minimum
Enterprise
($
OA. $3.17
OB. $0.32
C. $0.19
D. $3.49
Market
Capitalization (S Value
million)
6350
2423
675
326
267
million)
10,163
3472
3061
1192
1724
Price/ Enterprise Value/ Enterprise Value/
Book
0.73
P/E
7.36
18.09
2.64
9.76
1.68
14.89 0.39
6.55 0.82
11.33 1.25
+60% 112%
40%
-69%
Sales
1.4
1.10
1.40
1.31
1.57
1.35
+16%
18%
EBITDA
5.04
7.21
5.64
7.65
6.65
6.44
+22%
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 $80 million, excess cash of $60
million, $15 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.44, what is the difference
between the estimated share price of this firm if the average price - earnings ratio is used and the estimated share price
if the average enterprise value/EBITDA ratio is used?
Transcribed Image Text:Use the table for the question(s) below. Name Gannet New York Times McClatchy Media General Lee Enterprises Average Maximum Minimum Enterprise ($ OA. $3.17 OB. $0.32 C. $0.19 D. $3.49 Market Capitalization (S Value million) 6350 2423 675 326 267 million) 10,163 3472 3061 1192 1724 Price/ Enterprise Value/ Enterprise Value/ Book 0.73 P/E 7.36 18.09 2.64 9.76 1.68 14.89 0.39 6.55 0.82 11.33 1.25 +60% 112% 40% -69% Sales 1.4 1.10 1.40 1.31 1.57 1.35 +16% 18% EBITDA 5.04 7.21 5.64 7.65 6.65 6.44 +22% 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 $80 million, excess cash of $60 million, $15 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.44, 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?
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