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Suppose Rocky Brands has earnings per share of $2.27 and EBITDA of $29.5 million. The firm also has 5.4 million shares outstanding and debt of

Suppose Rocky Brands has earnings per share of $2.27 and EBITDA of $29.5 million. The firm also has 5.4 million shares outstanding and debt of $125 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 13.6 and an enterprise value to EBITDA multiple of 7.8, estimate the Enterprise Value of Rocky Brands by using both multiples. Which estimate is likely to be more accurate?

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