ellagia Inc is a nationwide retail chain specializing in womens apparel. The company has 135 million shares outstanding, currently trading at $5.63 per shares. However, only 60% of the shares are actively traded in the market as the founder still holds 40%. The current debt outstanding is $140 million. The company holds $20 million in cash. Its operating metrics are: Revenue = $633 million, EBITDA = $57 million, and earnings attributable to stockholders = $38 million.

a. What is the current enterprise value (EV) of Pellagia?

b. Suppose you are asked to value Pellagias shares based on its comparable firms? Do you think Pellagia is under or overvalued? Explain the basis of your valuation judgement. State your assumptions if required

Price to Earnings EV / Sales Abercrombie & Fitch 13.04 1.58 AnnTaylor Stores Corp. 15.36 1.41 Limited Brands Inc. (3.40) 0.96