EBK CORPORATE FINANCE
EBK CORPORATE FINANCE
4th Edition
ISBN: 9780134202778
Author: DeMarzo
Publisher: PEARSON CUSTOM PUB.(CONSIGNMENT)
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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 $1.67 and a book value of equity of $8.83 per share, a price to book ratio of 2.84 and P/E ratio 15.01. Estimate KCP’s share price based on PE ratio. Estimate KCP’s share price based on price to book ratio.
As the assistant to the CFO of Johnstone Inc., you must estimate its cost of common equity. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of common from retained earnings? Please show formula and answer
Provide step by step explanation.

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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