Pellagia Inc. is a nationwide retail chain specializing in women's apparel. The company's most popular lines are Aura and Home. Aura offers executive wear for women in the middle to high-end markets, and Home features casual but stylish clothes, also targeted at women in the middle to high-end markets. The company has 115 million shares outstanding with a current market price of $5.63 per share. The company is expected to show net income of $33 million in the next 12 months. Forecast sales and EBITDA are $615 million and $57 million, respectively. Debt outstanding is $140 million. (Show all your work for credit).

a. Do you think that the list below represents valid comparable companies?

b. What is the current enterprise market value of Pellagia?

c. Suppose you are asked to value Pellagia Inc. given the following information. What is your estimate of equity? Of enterprise value?

		Price to Earnings Price to Sales
Abercrombie & Fitch	13.04		1.28
Ann Taylor Stores Corp.	21.10		0.78
Bebe Stores Inc.	15.36		1.21
Gap Inc.	N/A		0.76
Limited Brands Inc.	16.59		0.96
Talbots Inc.	14.11		1.02