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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     -40% -69% -18% -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, $18 million of debt, and 120 million shares outstanding. If the average enterprise value to EBITDA for comparable businesses is used, which of the following is the best estimate of the firm’s share price?

On average, when a bid is announced, the stock price of the target drops.

  Year 1 2  3 4 Free Cash Flow  $12 million $18 million $22 million $26 million Brutus Buckeye Co.  is expected to generate the above free cash flows over the next four years, after which they are expected to grow at a rate of 5% per year. If the weighted average cost of capital is 10% and the company has cash of $85 million, debt of $65 million, and 30 million shares outstanding, what is the company’s expected current share price?

A firm can repurchase shares through a(n) ________ in which it offers to buy shares at a prespecified price during a short time period, generally within 20 days.

Brutus Buckeye Industries presently pays an annual dividend of $1.20 per share and it is expected that these dividend payments will continue indefinitely. If NoGrowth’s equity cost of capital is 10%, then the value of a share of the company’s stock is closest to ________.

Which of the following models of dementia care focuses on supporting the remaining abilities of the person to avoid excess disability?  

Brutus Buckeye Co. is expected to generate the below free cash flows over the next four years, after which they are expected to grow at a rate of 6% per year. If the weighted average cost of capital is 12% and the company has cash of $80 million, debt of $60 million, and 30 million shares outstanding, what is the company’s total market capitalization? (reminder: market capitalization = price per share * number of shares outstanding) Year 1 2 3 4 Free Cash Flow $8 million $10 million $22 million $24 million

Repetition typically strengthens what type of memory?

Brutus Buckeye Co announces the existence of substantial new oil reserves. The exploitation of these reserves is expected to increase the company’s free cash flow by $100 million per year for eight years. If investors had not been expecting this news, what is the most likely effect on the company’s stock price upon the announcement, given that the company has 80 million shares outstanding, no debt, and an equity cost of capital of 11%?

Supreme Industries issues the following announcement to holders of an issue of callable, convertible notes: “Prior to the close of business on May 17, 2008, holders may convert their Notes into shares of Supreme Industries common stock at 33.25 shares of Supreme Industries common stock per $1,000 principal amount of the Notes. Cash will be paid in lieu of fractional shares. On April 16, 2008, the last reported sale price of Supreme Industries common stock on the NYSE was $21.60 per share.”   If on May 17, Supreme Industries is trading as $24.60, what is the value of common stock a holder of a $1,000 note would receive?