In addition to footwear, Kenneth Cole Productions designs and sells handbags, apparel, and other accessories. You decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about KCP: it has sales of $518 million, EBITDA of $55.6 million, excess cash of $100 million, $3 million of debt, EPS of $1.65, book value of equity of $12.05 per share, and 21million shares outstanding. a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of 10.83 and a P/E multiple of 16.97. What share price would you estimate for KCP using each of these multiples, based on the data for KCP? b. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of 7.72 and a P/E multiple of 16.58. What share price would you estimate for KCP using each of these multiples based on the data for KCP?
Finance
In addition to footwear, Kenneth Cole Productions designs and sells handbags, apparel, and other accessories. You decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about KCP: it has sales of $518 million, EBITDA of $55.6 million, excess cash of $100 million, $3 million of debt, EPS of $1.65, book value of equity of $12.05 per share, and 21million shares outstanding.
a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of 10.83 and a P/E multiple of
16.97. What share price would you estimate for KCP using each of these multiples, based on the data for KCP?
b. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of 7.72
and a P/E multiple of 16.58. What share price would you estimate for KCP using each of these multiples based on the data for KCP?
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