Use the Table for the Question(s)below

question 5

Multiple Choice

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 $640 million, EBITDA of $84 million, excess cash of $67 million, $14 million of debt, and 120 million shares outstanding. If the average enterprise value to sales for comparable businesses is used, which of the following is the range of reasonable share price estimates?

• A)$6.27 to $8.86
• B)$4.59 to $12.23
• C)$1.15 to $1.53
• D)$6.19 to $9.32

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Definitions:

Physical Appearance

The outward look or aspects of a person or object, including features, shape, and body size, which can affect social perceptions and interactions.

Social Status

The position or rank of a person or group within a society, determined by various factors including wealth, occupation, and education.

Paraphilia

A condition characterized by abnormal sexual desires, typically involving extreme or dangerous activities.

Sexual Arousal

The physiological and psychological state of being awakened to sexual desire.