Use the Information for the Question(s)below

Use the information for the question(s) below.
Suppose that Texas Trucking (TT) has earnings per share of $3.45 and EBITDA of $45 million.TT also has 5 million shares outstanding and debt of $150 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 7.
-Based upon the price earnings multiple,the value of a share of Texas Trucking is closest to:

A) $49.30
B) $43.10
C) $24.15
D) $27.60

Correct Answer:

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