STU Company has the following financial information for its most recent period.

Free Cash Flows (Cash flows to the firm) $325,000

Equity Cash Flows (Cash flows to equity) $230,000

Market value of debt $481,000

A search of comparable firms ("comps") indicated the following price multiples.

Guideline Company Analysis

	Price / Earnings
	(P/E)	Price / EBITDA
Comp #1	9.3	6.7
Comp #2	9.1	7.8
Comp #3	7.2	7.0
Comp #4	9.1	8.2
Comp #5	10.0	7.7
Comp #6	6.8	6.9
Comp #7	6.0	6.1
Comp #8	7.3	7.3

Using the appropriate average (mean) price multiple and rounding the result to the nearest thousand dollars, the equity value for STU Company is:

$2,344,000

$2,633,000

$1,886,000

$1,863,000