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10. You are estimating the price/earnings multiple to use to value Paramount Corporation, by looking at the average price/earnings multiple of comparable firms. The following are the price/earnings ratios of firms in the entertainment business. Firm Disney (Walt) Time Warner King World Productions New Line Cinema CCL PLG CIR GET GTK A. What is the average P/E ratio? (2.5 points) Ratio 22.09 36.00 14.10 26.70 19.12 23.33 22.91 97.60 2600 B. Would you use all the comparable firms in calculating the average? Why or why not? (2.5 points) C. What assumptions are you making when you use the industry-average P/E ratio to value Paramount Communications? (2.5 points)