Suppose Rocky Brands has earnings per share of $2.30 and EBITDA of $30.7 million. The firm also has 5.4 million shares outstanding and debt of $125 million (net of cash). You believe Deckers Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Deckers has no debt. If Deckers has a P/E of 13.3 and an enterprise value to EBITDA multiple of 7.4, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? The value of Rocky Brands stock using the P/E ratio is $ million. (Round to one decimal place.)

Suppose Rocky Brands has earnings per share of $2.30 and EBITDA of $30.7 million. The firm also has 5.4 million shares outstanding and debt of $125 million (net of cash). You believe Deckers Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Deckers has no debt. If Deckers has a P/E of 13.3 and an enterprise value to EBITDA multiple of 7.4, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? The value of Rocky Brands stock using the P/E ratio is $ million. (Round to one decimal place.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A firm has net income of $21,350, depreciation of $2,780, interest of $640, and taxes of $10,990. The EBITDA multiple is 10.2. What is the value of the firm?
Yyristki Inc. has an equity market value of $4,750,390 and debt market value of $3,379,920. The cost of equity capital is 11.58% and the cost of debt capital is 6.21%. What is the firm's Weighted Average Cost of Capital (WACC)?
Based on the corporate valuation model, SG Telecom's total corporate value is $750 million. Its balance sheet shows $100 million notes payable, $200 million of long-term debt, $40 million of common stock, and $160 million of retained earnings, with a WACC of 10%. If the company has 24 million shares of stock outstanding, what is its price per share? Your answer should be between 5.03 and 58.72, rounded to 2 decimal places, with no special characters.
Which of the following would affect shareholders' equity? Group of answer choices A company borrows $100 million and buys $100 million in equipment. A company sells $100 million in assets for $100 million cash. A company receives payment for $100 million in accounts receivable. A company pays $100 million to shareholders as a dividend.
Use the information below to build a properly formatted income statement. A: The firm has 12,640,500 shares outstanding and EPS is $3.20.Calculate Net Income . B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's Revenue is $183,600,000 and its operating margin is 45.00%. Calculate EBIT. E: After completing the above: Gross Profit is 1.65 times its EBIT . Calculate Gross Profit . F: Given the above information, calculate the firm's Operating Expenses . G: Given the above information, calculate the firm's Interest Expense .
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CO A has cash flows of $0.76 per share, earnings of $1.25 per share and 115,000 shares outstanding. Co B. is a comparable public company with a price of $60 per share, cash flows of $2.14 per share, and 510,000 shares outstanding. If Co Bis a sufficiently comparable company, what do you estimate Co B. price per share to be? Assume: Risk free rate 4% Market risk premium 7% Cost of debt 4%, beta of debt is 0. Tax rate 23%
Little Book LTD has total assets of $860,000. There are 75,000 shares of stock outstanding, total book value of $750,000 with a market value of $12 a share. The firm has a profit margin of 6.5% and a total asset turnover of 1.5. Required: a) Calculate the company's EPS? 919r b) What is the market -to- book ratio? o zia S are
Blue Co. has a total liabilities of P400,000 on which 40% is a long-term liability. The non-current asset of the firm is half of the total asset and it is determined that its current ratio is 3:1. If the firm has a net profit of P144,000, what will be the return on asset? (type the answer in percentage with “%”)
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