Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Suppose that Texas Trucking (TT) has earnings per share of $4.45 and EBITDA of $65 million. TT also has 10 million shares outstanding and debt
Suppose that Texas Trucking (TT) has earnings per share of $4.45 and EBITDA of $65 million. TT also has 10 million shares outstanding and debt of $250 million (net of cash). You believe that Oklahoma Logistics and Transport (OLT) is comparable to TT in terms of its underlying business, but OLT has no debt. OLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 5. Based upon the enterprise value to EBITDA ratio, the value of a share of Texas Trucking is closest to: $6.5 $7.5 $5.5 $8.5
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started