Use the Table for the Question(s) Below

question 14

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 $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:

Perfectly Competitive

A market structure characterized by many sellers, identical products, and free entry and exit, leading to price-taking behavior.

Corn Snack Chips

A popular snack food made from cornmeal and flavored with various seasonings, often fried or baked.

Wheat Farming

The agricultural practice of cultivating wheat, a cereal grain, for its seed, primarily used for human consumption.

Downward Sloping

A term often used to describe a demand curve, indicating that as the price decreases, quantity demanded increases.