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# Market Capitalization Enterprise Value EPS

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Intern
Joined: 12 Oct 2012
Posts: 22

Kudos [?]: 17 [0], given: 1

Market Capitalization Enterprise Value EPS [#permalink]

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18 Nov 2012, 16:34
Hi guys ,

found this question

http://www.gmatpill.com/gmat-practice-t ... stion/1511

For part 1,

So for each company I divide the enterprise value by its revenue to find the EV/Revenue multiple,

so I get 9.25 for Cool Go and 1.85 , 1.9 , 3.43 and 1.56 for the other companies .
When I order the set of the numbers the median is 1.9 which is not in the range of 2x to 3x. So my answer was No.

For part 2,

Can I divide EBITDA by the EPS to find the # of outstanding shares , since EBITDA stands for earnings ? What difficulty level would you rate this question ?

Kudos [?]: 17 [0], given: 1

Intern
Joined: 27 Nov 2012
Posts: 37

Kudos [?]: 6 [0], given: 5

Re: Market Capitalization Enterprise Value EPS [#permalink]

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02 Dec 2012, 18:15
From my understanding, the P/E is the Market Capitalization/Earnings -> Market Capitalization/(EPS*#of shares)
Solve for number of shares I got 8250mil shares.

Kudos [?]: 6 [0], given: 5

Re: Market Capitalization Enterprise Value EPS   [#permalink] 02 Dec 2012, 18:15
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