Financial Management
Whitman School of Management
Spring 2016
Case Questions

American Greetings

1. The shares of American Greetings are currently trading at an EBITDA multiple
that is at the bottom of its peer group. Do you think a 3.5 times multiple is
appropriate for American Greetings? If not, what multiple of EBITDA do you
think is justified? What is the implied price per share that corresponds to that

2. Please model cash flows for American Greetings for fiscal years 2012 through 2015 based on the two sets of ratios in Case Exhibit 8. Based on the discounted cash flows associated with the forecast, what is the implied enterprise value of American Greetings and the corresponding share price?

3. What do you believe to be the value of American Greetings shares? Do you recommend repurchasing shares?