Question
In addition to footwear, Kenneth Cole Productions designs and sources handbags, apparel, and other accessories. You decide, therefore, to consider comparables for KCP outside the
In addition to footwear, Kenneth Cole Productions designs and sources 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
9.83
and a P/E multiple of
15.14
.
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
7.28
and a P/E multiple of
16.61
.
What share price would you estimate for KCP using each of these multiples based on the data for KCP?
a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of
9.83
and a P/E multiple of
15.14
.
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
$nothing
.
(Round to the nearest cent.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started