Use the table for the question(s) below. Name Market Capitalization ($ million) Enterprise Value ($ million) P/E Price/ Book Enterprise Value/ Sales Enterprise Value/ EBITDA Gannet 6350 10,163 7.36 0.73 1.4 5.04 New York Times 2423 3472 18.09 2.64 1.10 7.21 McClatchy 675 3061 9.76 1.68 1.40 5.64 Media General 326 1192 14.89 0.39 1.31 7.65 Lee Enterprises 267 1724 6.55 0.82 1.57 6.65 Average 11.33 1.25 1.35 6.44 Maximum +60% 112% +16% +22% Minimum minus−40% minus−69% minus−18% minus−19% 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 $600 million, EBITDA of $84 million, excess cash of $68million, $12 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. $1.08 to $1.44 B. $ 4.33 to $ 11.55 C.$ 5.92 to $ 8.37 D.$ 5.85 to $ 8.8 can you show me the steps to get answer C.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

22nd Edition

ISBN:9781305666160

Author:James A. Heintz, Robert W. Parry

Publisher:James A. Heintz, Robert W. Parry

Chapter15: Financial Statements And Year-end Accounting For A Merchandising Business

Section: Chapter Questions

Problem 4CE

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Use the table for the question(s) below.

Name	Market Capitalization ($ million)	Enterprise Value ($ million)	P/E	Price/ Book	Enterprise Value/ Sales	Enterprise Value/ EBITDA
Gannet	6350	10,163	7.36	0.73	1.4	5.04
New York Times	2423	3472	18.09	2.64	1.10	7.21
McClatchy	675	3061	9.76	1.68	1.40	5.64
Media General	326	1192	14.89	0.39	1.31	7.65
Lee Enterprises	267	1724	6.55	0.82	1.57	6.65
Average			11.33	1.25	1.35	6.44
Maximum			+60%	112%	+16%	+22%
Minimum			minus−40%	minus−69%	minus−18%	minus−19%

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 $600 million, EBITDA of $84 million, excess cash of $68
million, $12 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. $1.08 to $1.44

B. $ 4.33 to $ 11.55

C.$ 5.92 to $ 8.37

D.$ 5.85 to $ 8.8

can you show me the steps to get answer C.

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