Considering sale of its publishing division

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Time Warner is considering a sale of its publishing division. The division had earnings EBITDA of $550 million in the most recent year (depreciation was $150 million), growing at an estimated 5 percent a year (you can assume that depreciation grows at the same rate). The return on capital in the division is 15 percent and the corporate tax r ate is 40 percent. If the cost of capital for the division is 9 percent, estimate the following: a. Value/FCFF multiple. b. Value/EBIT multiple. c. Value/EBITDA multiple.

Reference no: EM131498736

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