Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has 5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logistics and Transport (JLT) is comparable to Logan Inc. in terms of its underlying business, but JLT has no debt. JLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the enterprise value to EBITDA ratio, the value of a share of Logan Inc. is closest to: a) $33.00. b) $82.50. c) $43.10. d) $21.25.

Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has 5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logistics and Transport (JLT) is comparable to Logan Inc. in terms of its underlying business, but JLT has no debt. JLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the enterprise value to EBITDA ratio, the value of a share of Logan Inc. is closest to: a) $33.00. b) $82.50. c) $43.10. d) $21.25.

Name: 20) Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of
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Description: 20) Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logisticsand Transport (JLT) is comparable to Logan Inc.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

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ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.

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20) Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has
5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logistics
and Transport (JLT) is comparable to Logan Inc. in terms of its underlying business, but JLT has no
debt. JLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the
enterprise value to EBITDA ratio, the value of a share of Logan Inc. is closest to:
a) $33.00.
b) $82.50.
c) $43.10.
d) $21.25.

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