Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.76 and a book value of equity of $12.93 per share. Use the multiples approach to estimate KCP's value based on comparable firms given in the following table: a. Using the average P/E multiple from the table above, estimate KCP's share price. b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? c. Using the average price to book value multiple in the table above, estimate KCP's share price. d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? a. Using the average P/E multiple from the table above, estimate KCP's share price. KCP's share price for this case will be $ (Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? The highest price will be $ The lowest price will be $ (Round to the nearest cent.) (Round to the nearest cent.) c. Using the average price to book value multiple in the table above, estimate KCP's share price. KCP's share price for this case will be $ ☐ (Round to the nearest cent.) d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? The highest price will be $ (Round to the nearest cent.) Data table - X
Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.76 and a book value of equity of $12.93 per share. Use the multiples approach to estimate KCP's value based on comparable firms given in the following table: a. Using the average P/E multiple from the table above, estimate KCP's share price. b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? c. Using the average price to book value multiple in the table above, estimate KCP's share price. d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? a. Using the average P/E multiple from the table above, estimate KCP's share price. KCP's share price for this case will be $ (Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? The highest price will be $ The lowest price will be $ (Round to the nearest cent.) (Round to the nearest cent.) c. Using the average price to book value multiple in the table above, estimate KCP's share price. KCP's share price for this case will be $ ☐ (Round to the nearest cent.) d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? The highest price will be $ (Round to the nearest cent.) Data table - X
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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Transcribed Image Text:Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.76 and a book value of equity of $12.93 per share. Use the multiples approach to estimate KCP's value based on the
comparable firms given in the following table:
a. Using the average P/E multiple from the table above, estimate KCP's share price.
b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above?
c. Using the average price to book value multiple in the table above, estimate KCP's share price.
d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above?
a. Using the average P/E multiple from the table above, estimate KCP's share price.
KCP's share price for this case will be $
(Round to the nearest cent.)
b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above?
The highest price will be $
(Round to the nearest cent.)
The lowest price will be $
(Round to the nearest cent.)
c. Using the average price to book value multiple in the table above, estimate KCP's share price.
KCP's share price for this case will be $
(Round to the nearest cent.)
d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above?
The highest price will be $
The lowest price will be $
(Round to the nearest cent.)
(Round to the nearest cent.)
Data table
P
E
Price
Book
Enterprise Value Enterprise Value
Sales
EBITDA
Average
15.01
2.84
1.06
8.49
Maximum
+51%
+186%
+106%
+27%
Minimum
-42%
-61%
-56%
-22%
×
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