Use the Information for the Question(s)below

question 80

Multiple Choice

Use the information for the question(s) below.
Suppose that Texas Trucking (TT) has earnings per share of $3.45 and EBITDA of $45 million.TT also has 5 million shares outstanding and debt of $150 million (net of cash) .You believe that Oklahoma Logistics and Transport (OLT) is comparable to TT in terms of its underlying business,but OLT has no debt.OLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7.
-Based upon the enterprise value to EBITDA ratio,the value of a share of Texas Trucking is closest to:

• A)$33.00.
• B)$82.50.
• C)$43.10.
• D)$21.25.

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Definitions:

American Independence

The state of being free and independent, which for the United States was achieved from British rule and declared on July 4, 1776.

Colonists

People who were sent to live in new territories but remained subjects or citizens of their parent country; often involved in the colonization processes of different continents.

Revolutionary War

A war fought from 1775 to 1783, in which the Thirteen American colonies won independence from Great Britain, leading to the establishment of the United States of America.

Avoided

Avoided signifies purposely staying away from or preventing an occurrence of a specific act, situation, or engagement.