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Consider the following data for the airline industry for December 2015 (EV=enterprise value, Book=equity book value) Suppose Hawaiian Airlines (HA) has 53 million shares outstanding.

Consider the following data for the airline industry for December 2015 (EV=enterprise value, Book=equity book value)

Suppose Hawaiian Airlines (HA) has 53 million shares outstanding. Estimate Hawaiians share value using each of the five valuation multiples in Table, based on the median valuation multiple of the other seven airlines shown.

Market Capitalization Enterprise Value (EV) EV/Sales EV/EBITDA EV/EBIT P/E P/Book
Delta Air Lines (DAL) 40857 45846 1.1x 6.0x 7.6x 15.0x 4.0x
American Airlines (AAL) 27249 38937 0.9x 4.5x 5.5x 6.2x 7.5x
United Continental (UAL) 22000 28522 0.7x 4.2x 5.6x 3.4x 2.6x
Southwest Airlines (LUV) 28499 28125 1.5x 6.0x 7.4x 16.1x 4.1x
Alaska Air (ALK) 10396 9870 1.8x 6.3x 7.9x 13.4x 4.4x
JetBlue Airways (JBLU) 7338 8189 1.3x 6.1x 7.9x 13.8x 2.4x
SkyWest (SKYW) 1039 2590 0.8x 5.2x 11.1x 21.2x 0.7x
Hawaiian (HA) 1974 2281 1.0x 5.3x 6.9x 15.1x 5.3x

Calculate Hawaiian's share values using each of the five valuation multiples below: (Round the median to one decimal place. Round the share price to the nearest cent. Round the EV and market cap to the nearest integer.)

Solve for Median, Implied EV, Implied market cap, and Implied share price for EV/Sales

EV/Sales

Hawaiian

1.0

Median

Implied EV

$

Implied market cap

$

Implied share price

$

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