Multiples Analysis: Turner Corp

question 67

Multiple Choice

Multiples analysis: Turner Corp. has debt of $230 million and generated a net income of $121 million in the last fiscal year. In attempting to determine the total value of the firm, an investor identified a similar firm in Jacobs, Inc., an all-equity firm. This firm had 150 million shares outstanding, a share price of $14.25, and net income of $182 million. What is the total value of Turner Corp.? Round to the nearest million dollars.

• A) $1,421 million
• B) $1,651 million
• C) $1,191million
• D) $1,715 million

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Definitions:

Socio-historical Explanation

An approach to understanding phenomena by examining social and historical contexts.

Deductive Reasoning

A logical process where a conclusion is based on the concordance of multiple premises that are generally assumed to be true.

Ultimate Attribution Error

A bias in which positive behaviors by out-group members are attributed to situational factors, while negative behaviors are attributed to their character.

Group-Enhancing Bias

A cognitive bias that leads people to view their own group more favorably compared to others.