Question
Suppose Rocky Brands has earnings per share of $2.46 and EBITDA of $29.8 million. The firm also has 5.7 million shares outstanding and debt of
Suppose Rocky Brands has earnings per share of $2.46 and EBITDA of $29.8 million. The firm also has 5.7 million shares outstanding and debt of $135 million (net of cash). You believe Deckers Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Deckers has no debt. If Deckers has a P/E of 13.5 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? The value of Rocky Brands stock using the P/E ratio is $nothing million. (Round to one decimal place.)
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