Use the Table for the Question(s)below

question 61

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 average enterprise value to sales for comparable businesses is used,which of the following is the range of reasonable share price estimates?

• A)$6.07 to $8.59
• B)$5.72 to $8.09
• C)$1.12 to $1.68
• D)$6.00 to $9.04
• E)$7.01 to $8.78

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Definitions:

Speculative Frenzy

A period marked by widespread excitement or irrational behavior among investors, leading to significant asset price volatility.

Federal Reserve Bank

The central banking system of the United States, established in 1913, which aims to provide the nation with a safer, more flexible, and stable monetary and financial system.

Economic Speculation

The practice of engaging in risky financial transactions in an attempt to profit from short or medium-term fluctuations in the market value of a tradable financial instrument.

Alan Greenspan

Former Chairman of the Federal Reserve of the United States, who served from 1987 to 2006 and played a key role in American monetary policy during that period.