uppose Rocky Brands has earnings per share of $2.35 and EBITDA of $31.2 milion. The firm also has 4.7 million shares outstanding and debt of $120 milion (not of ash) 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 31 and an onterprise value to EBITDA multiple of 7.1, estimate the value of Rocky Brands stock using both multiples Which estimate is ikely to be more accurate? Tocky Brands' stock value by using the P/E ratio is S per share (Round to two decimal places) he value of Rocky Brands by using the PE ratio is $milion (Round to one decimal place)
uppose Rocky Brands has earnings per share of $2.35 and EBITDA of $31.2 milion. The firm also has 4.7 million shares outstanding and debt of $120 milion (not of ash) 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 31 and an onterprise value to EBITDA multiple of 7.1, estimate the value of Rocky Brands stock using both multiples Which estimate is ikely to be more accurate? Tocky Brands' stock value by using the P/E ratio is S per share (Round to two decimal places) he value of Rocky Brands by using the PE ratio is $milion (Round to one decimal place)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1.
Transcribed Image Text:Suppose Rocky Brands has earmnings per share of $2.35 and EBITDA of $312 million. The firm also has 4.7 million shares outstanding and debt of $120 milion (not 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
13.1 and an onterprise value to EBITDA multiple of 7.1, estimate the value of Rocky Brands stock using both multiples Which estimate is ikely to be more accurate?
Rocky Brands' stock value by using the P/E ratio is S per share. (Round to two decimal places.)
The value of Rocky Brands by using the PE ratio is $milion (Round to one decimal place)
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