Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

After researching the competitors of Levi Strauss & Co (Levis), which is a private company, you determine that most comparable firms have the following valuation

After researching the competitors of Levi Strauss & Co (Levis), which is a private company, you determine that most comparable firms have the following valuation ratios (see the table below). Further research reveals that Levi Strausss EBITDA is $ 576.1 million and its Earnings per Share (EPS) is $1.5. The company has $25 million in cash, $1,441 million in debt (market value), and 84 million shares outstanding.

Urban Outfitters

GAP

Guess

American Eagle

EV/EBITDA

5.1

4.1

5.8

4.8

P/E

9

8.3

12.7

11.5

Estimate the stock price of Levis using the average EV / EBITDA of its competitors.

A. $29.31

B. $17.09

C. $33.09

D. $10.11

E. $25.95

F. $27.17

Use the information provided in the question above. Estimate the stock price of Levis using the average P / E of its competitors.

A. $47.24

B. $17.67

C. $15.56

D. $33.67

E. $18.25

F. $23.59

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

International financial management

Authors: Jeff Madura

9th Edition

978-0324593495, 324568207, 324568193, 032459349X, 9780324568202, 9780324568196, 978-0324593471

More Books

Students also viewed these Finance questions

Question

What are the role of supervisors ?

Answered: 1 week ago