Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose Rocky Brands has earnings per share of $2.26 and EBITDA of $29.7 million. The firm also has 5.5 million shares outstanding and debt of

image text in transcribed
Suppose Rocky Brands has earnings per share of $2.26 and EBITDA of $29.7 million. The firm also has 5.5 million shares outstanding and debt of $135 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 P/E of 13.1 and an enterprise value to EBITDA multiple of 7.8, 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 $ per share. (Round to two decimal places.) The value of Rocky Brands by using the PIE ratio is \$ million. (Round to one decimal place.)

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

Step: 3

blur-text-image

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

Building The High Performance Finance Function

Authors: André De Waal , Eelco Bilstra ,Jacques Bootsman

1st Edition

1799869296,1799869326

More Books

Students also viewed these Finance questions