In addition to footwear, Kenneth Cole Productions designs and sells handbags, apparel, and other accessories. You decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about KCP: it has sales of

$518

million, EBITDA of

$55.6

million, excess cash of

$100

million,

$3

million of debt, EPS of

$1.65,

book value of equity of

$12.05

per share, and

21

million shares outstanding.

a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of

11.84

and a P/E multiple of

19.54.

What share price would you estimate for KCP using each of these multiples, based on the data for KCP?

b. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of

8.46

and a P/E multiple of

16.81.

What share price would you estimate for KCP using each of these multiples based on the data for KCP?

Question content area bottom

Part 1

a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of

11.84

and a P/E multiple of

19.54.

What share price would you estimate for KCP using each of these multiples, based on the data for KCP?

Using the Enterprise value/EBITDA ratio for Fossil the price is?

(Round to the nearest cent.)