Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose Rocky Brands has earnings per share of $2.25 and EBITDA of $30.7 million. The firm also has 5.8 million shares outstanding and debt of

image text in transcribed
Suppose Rocky Brands has earnings per share of $2.25 and EBITDA of $30.7 million. The firm also has 5.8 million shares outstanding and debt of $140 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a Ple of 13.4 and an enterprise value to EBITDA multiple of 7.6, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? Rocky Brands stock value by using the P/E ratio is $ 30.15 per share. (Round to two decimal places.) The value of Rocky Brands by using the PIE ratio is $ 174.9 million (Round to one decimal place.) The value of Rocky Brands by using the EBITDA ratio is $ million (Round to one decimal place.) Rocky Brands' stock value by using the EBITDA ratio is $ per share (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Corporate Finance

Authors: John B. Guerard Jr. Anureet Saxena, Mustafa Gultekin

2nd Edition

3030435466, 978-3030435462

More Books

Students also viewed these Finance questions