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Rockebakker Records (RR) has earnings per share of $2.25 and EBITDA of $31.3 million. The firm also has 5.2 million shares outstanding and debt of
Rockebakker Records (RR) has earnings per share of $2.25 and EBITDA of $31.3 million. The firm also has 5.2 million shares outstanding and debt of $140 million (net of cash). You believe Anja's Music Store (AMS) is comparable to RR in terms of its underlying business, but AMS has no debt. If AMS has a P/E of 13.1 and an Enterprise Value to EBITDA multiple of 7.5, estimate the value of RR stock using both multiples. Which estimate is likely to be more accurate? .... RR's stock value by using the P/E ratio is $ per share. (Round to two decimal places.) The market capitalization of RR by using the P/E ratio is $ million. (Round to one decimal place.) The market capitalization of RR by using the EV/EBITDA ratio is $ million. (Round to one decimal place.) LO ht 1, RR's stock value by using the EV/EBITDA ratio is $ per share (Round to two decimal places.) Which estimate is likely to be more accurate? (Select from the drop-down menu.) Hint: The more accurate valuation method would take debt into consideration is the more accurate valuation method. ee Enterprise Value to EBITDA ratio S P/E ratio a He fro Ma
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