Please provide the accurate answer to this general accounting problem using valid techniques. Tech Vision Corp. is a publicly traded firm, with120 million diluted shares outstanding, tradingat $42.00 per share. The company has $1.2billion of debt outstanding, with a cost of debtat 5.8%, and a marginal tax rate of 35%. Thecompany has $120 million of cash on its balancesheet.What is the enterprise value of Tech VisionCorp.?

Step 1: Define Enterprise ValueEnterprise value (EV) is a measure of a company's total value. It is…

Answered: Tech Vision Corp. is a publicly traded…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 8P

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Suppose Rocky Brands has earnings per share of $2.30 and EBITDA of $30.7 million. The firm also has 5.4 million shares outstanding and debt of $125 million (net of cash). You believe Deckers Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Deckers has no debt. If Deckers has a P/E of 13.3 and an enterprise value to EBITDA multiple of 7.4, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? The value of Rocky Brands stock using the P/E ratio is $ million. (Round to one decimal place.)
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Suppose Rocky Brands has earnings per share of $2.35 and EBITDA of $30.8 million. The firm also has 5.8 million shares outstanding and debt of $130.7 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 13.3 and an enterprise value to EBITDA multiple of 7.6, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? Rocky Brands' stock price per share by using the P/E ratio is $ per share. (Round to two decimal places.)
Suppose Rocky Brands has earnings per share of $2.39 and EBITDA of $29.7 million. The firm also has 5.9 million shares outstanding and debt of $130 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 13.6 and an enterprise value to EBITDA multiple of 7.9, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? Rocky Brands' stock value by using the P/E ratio is $ The value of Rocky Brands by using the P/E ratio is $ per share. (Round to two decimal places.) million. (Round to one decimal place.)
Suppose Rocky Brands has earnings per share of $2.35 and EBITDA of $31.4 million. The firm also has 5.9 million shares outstanding and debt of $115 million (net of cash). You believe Jared's Outdoor Corporation is comparable to Rocky Brands in terms of its underlying business, but Jared's has no debt. If Jared's has a P/E of 13.3 and an enterprise value to EBITDA multiple of 7.5, estimate the value of Rocky Brands stock using both multiples. Which estimate is likely to be more accurate? Rocky Brands' stock value by using the P/E ratio is $31.26 per share. (Round to two decimal places.) million. (Round to one decimal place.) The value of Rocky Brands by using the P/E ratio is $ 184.4 The value of Rocky Brands by using the EBITDA ratio is $ million. (Round to one decimal place.)
CSH has EBITDA of $5 million. You feel that an appropriate enterprise value/EBITDA ratio for CSH is 9. CSH has $10 million in debt, $2 million in cash and 800 000 shares outstanding. What is your estimate of CSH’s share price?
Unida Systems has 43 million shares outstanding trading for $12 per share. In addition, Unida has $106 million in outstanding debt. Suppose Unida's equity cost of capital is 17%, its debt cost of capital is 8%, and the corporate tax rate is 33%. a. What is Unida's unlevered cost of capital? b. What is Unida's after-tax debt cost of capital? c. What is Unida's weighted average cost of capital?

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