Use the Table for the Question(s)below

question 34

Multiple Choice

Use the table for the question(s) below.
-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?

• A)$0.34
• B)$0.49
• C)$4.94
• D)$5.43

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Definitions:

Direct Materials Purchases Variance

the difference between the actual cost of direct materials purchased and the expected (or standard) cost, indicating how effectively a company is managing its resources.

Standard Labor-Hours

A pre-determined measure of the amount of labor time expected to complete a single unit of production or perform a task, often used in cost accounting.

Standard Amount

A benchmark or norm for measuring performance, often used in budgeting and accounting to set expected costs or outputs.

Variable Manufacturing Overhead

Refers to the production costs that change in proportion to the amount of production output, excluding direct materials and direct labor costs.