Question
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
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