EBK CORPORATE FINANCE
EBK CORPORATE FINANCE
4th Edition
ISBN: 8220103145947
Author: DeMarzo
Publisher: PEARSON
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Chapter 9, Problem 26P

Suppose that In January 2006, Kenneth Cole Productions had sales of $518 million, EBITDA of $55.6 million, excess cash of $100 million, $3 million of debt, and 21 million shares outstanding.

  1. a. Using the average enterprise value to sales multiple in Table 9.1, estimate KCP’s share price.
  2. b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in Table 9.1?
  3. c. Using the average enterprise value to EBITDA multiple in Table 9.1, estimate KCP’s share price.
  4. d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples In Table 9.1?
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Suppose that in January 2006, Kenneth Cole Productions had EPS of $1.76 and a book value of equity of $12.93 per share. Use the multiples approach to estimate KCP's value based on the comparable firms given in the following table: a. Using the average P/E multiple from the table above, estimate KCP's share price. b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? c. Using the average price to book value multiple in the table above, estimate KCP's share price. d. What range of share prices do you estimate based on the highest and lowest price to book value multiples in the table above? a. Using the average P/E multiple from the table above, estimate KCP's share price. KCP's share price for this case will be $ (Round to the nearest cent.) b. What range of share prices do you estimate based on the highest and lowest P/E multiples in the table above? The highest price will be $ (Round to the nearest cent.) The lowest price will…
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EBK CORPORATE FINANCE

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Earnings per share (EPS), basic and diluted; Author: Bionic Turtle;https://www.youtube.com/watch?v=i2IJTpvZmH4;License: Standard Youtube License