Suppose that in January 2006, Kenneth Cole Productions had sales of $524 million, EBITDA of $54.3 million, excess cash of $103 million, $4.4 million of debt, and 20 million shares outstanding. Use the multiples approach to estimate K ased on the following data from comparable firms: . Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. . What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. c. Using the average enterprise value to EBITDA 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 enterprise value to EBITDA multiples in the table above? . Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. KCP's share price using the average enterprise value to sales multiple will be $. (Round to the nearest cent.) . What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. The highest price will be S. (Round to the nearest cent.) The lowest price will be $ (Round to the nearest cent.) c. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price. KCP's share price using the average enterprise value to EBITDA multiple will be $. (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Enterprise Value Enterpris Sales 1.06 EBI + 106% -56% Average Maximum Minimum P E 15.01 + 51% -42% Price Book 2.84 +186% -61% 8. +2 -2
Suppose that in January 2006, Kenneth Cole Productions had sales of $524 million, EBITDA of $54.3 million, excess cash of $103 million, $4.4 million of debt, and 20 million shares outstanding. Use the multiples approach to estimate K ased on the following data from comparable firms: . Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. . What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. c. Using the average enterprise value to EBITDA 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 enterprise value to EBITDA multiples in the table above? . Using the average enterprise value to sales multiple in the table above, estimate KCP's share price. KCP's share price using the average enterprise value to sales multiple will be $. (Round to the nearest cent.) . What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above. The highest price will be S. (Round to the nearest cent.) The lowest price will be $ (Round to the nearest cent.) c. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price. KCP's share price using the average enterprise value to EBITDA multiple will be $. (Round to the nearest cent.) Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Enterprise Value Enterpris Sales 1.06 EBI + 106% -56% Average Maximum Minimum P E 15.01 + 51% -42% Price Book 2.84 +186% -61% 8. +2 -2
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:Suppose that in January 2006, Kenneth Cole Productions had sales of $524 million, EBITDA of $54.3 million, excess cash of $103 million, $4.4 million of debt, and 20 million shares outstanding. Use the multiples approach to estimate KCP's value
based on the following data from comparable firms:
a. Using the average enterprise value to sales multiple in the table above, estimate KCP's share price.
b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above.
c. Using the average enterprise value to EBITDA 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 enterprise value to EBITDA multiples in the table above?
(---)
a. Using the average enterprise value to sales multiple in the table above, estimate KCP's share price.
KCP's share price using the average enterprise value to sales multiple will be $
(Round to the nearest cent.)
b. What range of share prices do you estimate based on the highest and lowest enterprise value to sales multiples in the table above.
The highest price will be $ (Round to the nearest cent.)
The lowest price will be $. (Round to the nearest cent.)
c. Using the average enterprise value to EBITDA multiple in the table above, estimate KCP's share price.
KCP's share price using the average enterprise value to EBITDA multiple will be $
(Round to the nearest cent.)
d. What range of share prices do you estimate based on the highest and lowest enterprise value to EBITDA multiples in the table above?
The highest price will be $
(Round to the nearest cent.)
The lowest price will be $. (Round to the nearest cent.)
Data table
(Click on the following icon in order to copy its contents into a spreadsheet.)
P
E
15.01
+ 51%
Price
Book
2.84
+ 186%
- 42%
- 61%
Average
Maximum
Minimum
Print
Enterprise Value Enterprise Value
Sales
1.06
+ 106%
- 56%
Done
EBITDA
8.49
+ 27%
- 22%
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VIEWStep 3: Answer to part b. Computation of highest and lowest Share price using enterprise value to sales .
VIEWStep 4: Answer to part c. Computation of Share price using average enterprise value to EBITDA multiple.
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