Homework: Chap 9 valuing Stocks part 2 dcf COMPARABLES Save Score: 0 of 1 pt 10 of 12 (11 complete) HW Score: 91.67%. 11 of 12 pts 29-22 (similar to) Question Help Kenneth Cole (KCP) had sales of $523.2 million in 2005. Based on KCP'a past profitability and investment needs, you expect EBIT to be 9% of sales, increases in net working capital requirements to be 10% of any increase in sales and net investment capital expencitures in excess of depreciation) to bevy of any increase in sales, KCP has $94.3 milion in cash, $3.2 milion in debt 22 million shares outstanding, a tax rate of 37%, and a weighted average cost of capital of 11% a. Sparce you believe KCP's initial revenue growth rate will be between 4%, and 17% with growth slowing in equal stens ta 4%by year 2011). What range of share prices for KCP is consistent with these forecasts? b. Suppose you believe KCP's EBIT margin will be between 7% and 10% of sales. What range of share prices for KCP is consistent with these forecasts keeping KCP's initial revenue growth at 9% with growth slowing in cqual steps to 4% by year 2011/? c. Suppose you believe KCP's weighled average cost of capital is between 10% and 12%. What range of share prices for KCP is consistent with these forecasts keeping KCP's initial revenue growth and EBIT margin at 9% with growth slowing in equal slegs to 4% by year 2011)? d. What range of share prices is consistent if you vary the estimates as in parls (a), (b), and (c) simultaneously? That is Case 1 Case 2 Revenue growth rate 4% EBIT margin 726 10% WACC 1054 12% a. Supuose you believe KCP's inilal revenue growth rate will be betweeri 4% and 11% (with growth slowing in equal sleps to 4% by year 2011). Whal range of stare prices for KCP is consislerit with these forecasts? (Select the best choice below.) O A The range of share prices consistent with these forecasts is from $19.47 to 524.14. OB. The range of share prices xarsistant with these forecasts is from $12.57 ta $26.16. OC. The range of share prices oreistent with these forecasts is from $27.01 to $21.13 OD. The range of share prices consistent with these forecasts is from $24.47 to 523.62. Click to select your answer and then click Check Answer. ? 3 parts remaining Clear All Check Answer Homework: Chap 9 valuing Stocks part 2 dcf COMPARABLES Save Score: 0 of 1 pt 10 of 12 (11 complete) HW Score: 91.67%. 11 of 12 pts 29-22 (similar to) Question Help Kenneth Cole (KCP) had sales of $523.2 million in 2005. Based on KCP'a past profitability and investment needs, you expect EBIT to be 9% of sales, increases in net working capital requirements to be 10% of any increase in sales and net investment capital expencitures in excess of depreciation) to bevy of any increase in sales, KCP has $94.3 milion in cash, $3.2 milion in debt 22 million shares outstanding, a tax rate of 37%, and a weighted average cost of capital of 11% a. Sparce you believe KCP's initial revenue growth rate will be between 4%, and 17% with growth slowing in equal stens ta 4%by year 2011). What range of share prices for KCP is consistent with these forecasts? b. Suppose you believe KCP's EBIT margin will be between 7% and 10% of sales. What range of share prices for KCP is consistent with these forecasts keeping KCP's initial revenue growth at 9% with growth slowing in cqual steps to 4% by year 2011/? c. Suppose you believe KCP's weighled average cost of capital is between 10% and 12%. What range of share prices for KCP is consistent with these forecasts keeping KCP's initial revenue growth and EBIT margin at 9% with growth slowing in equal slegs to 4% by year 2011)? d. What range of share prices is consistent if you vary the estimates as in parls (a), (b), and (c) simultaneously? That is Case 1 Case 2 Revenue growth rate 4% EBIT margin 726 10% WACC 1054 12% a. Supuose you believe KCP's inilal revenue growth rate will be betweeri 4% and 11% (with growth slowing in equal sleps to 4% by year 2011). Whal range of stare prices for KCP is consislerit with these forecasts? (Select the best choice below.) O A The range of share prices consistent with these forecasts is from $19.47 to 524.14. OB. The range of share prices xarsistant with these forecasts is from $12.57 ta $26.16. OC. The range of share prices oreistent with these forecasts is from $27.01 to $21.13 OD. The range of share prices consistent with these forecasts is from $24.47 to 523.62. Click to select your answer and then click Check Answer. ? 3 parts remaining Clear All Check
