Allen_Berk_DeMarzo_Problem_9-25_Start

xlsx

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East Carolina University *

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Finance

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Feb 20, 2024

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xlsx

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Problem 9-25 a. Using the average P/E multiple in Table 9.1 (far below), estimate KCP b. c. Using the average price to book value multiple in Table 9.1 (far below d. EPS $1.65 Book value of equity $12.05 a. Using the average P/E multiple in Table 9.1 (far below), estimate KCP Price per share b. Highest P/E Lowest P/E Highest share price Lowest share price c. Using the average price to book value multiple in Table 9.1 (far below Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.65 a share. Complete the steps below using cell references to given data or previous reference is all you need. To copy/paste a formula across a row or down mixed cell reference may be preferred. If a specific Excel function is to b of that function. Do not type in numerical data into a cell or function. Ins which the data is found. Make your computations only in the blue cells h otherwise directed, use the earliest appearance of the data in your formu What range of share prices do you estimate based on the highest and l below)? What range of share prices do you estimate based on the highest and l Table 9.1 (far below)? What range of share prices do you estimate based on the highest and l below)?

Price per share d. Highest price-to-book Lowest price-to-book Highest share price Lowest share price Table 9-1 Stock Prices and Multiples for the Footwear Industry, January 2006 Market Enterprise Stock Price Capitalization Value Ticker Company ($) ($ million) ($ million) NKE Nike 84.20 21,830 20,518 Puma AG 312.05 5,088 4,593 RBK Reebok 58.72 3,514 3,451 WWW Wolverine World Wide 22.10 1,257 1,253 BWS Brown Shoe 43.36 800 1,019 SKX Sketchers 17.09 683 614 SRR Stride Rite 13.70 497 524 DECK Deckers Outdoor 30.05 373 367 WEYS Weco Group 19.90 230 226 RCKY Rocky Shoes & Boots 19.96 106 232 DFZ R.G. Barry Corp. 6.83 68 92 BOOT LaCross Footwear 10.40 62 75 Average (excl. KCP) Maximum/Average Minimum/Average Requirements 1. Start Excel - completed. 2. 3. What range of share prices do you estimate based on the highest and l Table 9.1 (far below)? PMMA Y In cell D15 , by using cell references, calculate the share price based o In cell D19 , by using cell references and the function MAX , determin Note : Be sure to enter the corresponding cells for all the twelve comp

4. 5. 6. 7. 8. 9. 10. 11. 12. Save the workbook. Close the workbook and then exit Excel. Submit In cell D20 , by using cell references and the function MIN , determine Note : Be sure to enter the corresponding cells for all the twelve comp In cell D21 , by using cell references, calculate the highest share price pt.) . Note : Use the highest P/E multiple determined above in your calculat In cell D22 , by using cell references, calculate the lowest share price b pt.) . Note : Use the lowest P/E multiple determined above in your calculatio In cell D26 , by using cell references, calculate the share price based o pt.) . In cell D30 , by using cell references and the function MAX , determin (1 pt.) . Note : Be sure to enter the corresponding cells for all the twelve comp In cell D31 , by using cell references and the function MIN , determine pt.) . Note : Be sure to enter the corresponding cells for all the twelve comp In cell D32 , by using cell references, calculate the share price based o (1 pt.) . Note : Use the highest price to book value multiple determined above In cell D33 , by using cell references, calculate the share price based o (1 pt.) . Note : Use the lowest price to book value multiple determined above i

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P’s share price. w), estimate KCP’s share price. P’s share price. w), estimate KCP’s share price. and a book value of equity of $12.05 per calculations. In some cases, a simple cell a column, an absolute cell reference or a be used, the directions will specify the use stead, make a reference to the cell in highlighted below. In all cases, unless ulas, usually the Given Data section. lowest P/E multiples in Table 9.1 (far lowest price to book value multiples in lowest P/E multiples in Table 9.1 (far

Enterprise Enterprise P/E Price/Book Value/Sales Value/EBITDA 16.64 3.59 1.43 8.75 14.99 5.02 2.19 9.02 14.91 2.41 0.90 8.58 17.42 2.71 1.20 9.53 22.62 1.91 0.47 9.09 17.63 2.02 0.62 6.88 20.72 1.87 0.89 9.28 13.32 2.29 1.48 7.44 11.97 1.75 1.06 6.66 8.66 1.12 0.92 7.55 9.20 8.11 0.87 10.75 12.09 1.28 0.76 8.30 15.01 2.84 1.06 8.49 51% 186% 106% 27% -42% -61% -56% -22% lowest price to book value multiples in on average P/E multiple (1 pt.) . ne the highest P/E multiple (1 pt.) . panies in the function MAX .

the workbook as directed. e the lowest P/E multiple (1 pt.) . panies in the function MIN . based on the industry’s P/E multiple (1 tions. based on the industry’s P/E multiple (1 ions. on average price to book value multiple (1 ne the highest price to book value multiple panies in the function MAX . e the lowest price to book value multiple (1 panies in the function MIN . on the highest price to book value multiple in your calculations. on the lowest price to book value multiple in your calculations.

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