Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

25. Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.67 and a book value of equity of $12.17 per share. a. Using

image text in transcribed
image text in transcribed
25. Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.67 and a book value of equity of $12.17 per share. a. Using the average P/E multiple in Table 9.1, estimate KCP's share price. b. What range of share prices do you estimate based on the highest and lowest P/E multiples in Table 9.12 c. Using the average price to book value multiple in Table 9.1, estimate KCP's share price. d. What range of share prices do you estimate based od the highest and lowest price to book value multiples in Table 9.12 an airline. EV/EBITDA EV/EBIT P/E 6.0x 7.6% 15.0x P/Book 4.Ox 7.5x 2.6x 5.5x EV/Sales 1.1 x 0.9x 0.7x 1.5x 1.8x 4.5x 4.2x Market Company Name Capitalization Delta Air Lines (DAL) 40,857 American Airlines (AAL) 27.249 United Continental (UAL) 22,000 Southwest Airlines (LUV) 28,499 Alaska Air (ALK) 10.396 JetBlue Airways (JBLU) 7,338 SkyWest (SKYW) 1,039 Hawaiian (HA) 1.974 Source: Capital IQ and Yahoo! Finance 5.6x Enterprise Value (EV) 45,846 38.937 28,522 28,125 9,870 8.189 2,590 2.281 6.0x 7.4x 4.1x 6,3x 7.9x 6.2x 3.1x 16.1x 13.4x 13.8x 21.2x 15.1x 4.4 1.3x 6.1x 7.9% 2.4x 5.2x 11.1x 0.8x 1.0x 0.7x 5.3x 5.3x 6.9x

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Clarence Dillon A Wall Street Enigma

Authors: Robert C. Perez , Edward F. Willett

1st Edition

1568330480

More Books

Students also viewed these Finance questions

Question

2. What, according to Sergey, was strange at this meeting?

Answered: 1 week ago