KSuppose Rocky Brands has earnings per share of $2.48 and EBITDA of $31.2 million. The firm also has 4.8 million shares outstanding and debt of $135 million (net of cash). You believe Jared'sOutdoor 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 13.5 and an enterprise value to EBITDA multiple of 7.8,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.)

Given the earnings per share (EPS) of Rocky Brands at $2.48, and the EBITDA at $31.2 million:Rocky…

Answered: K Suppose Rocky Brands has earnings per…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 13P

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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.)
Suppose Rocky Brands has earnings per share of $2.28 and EBITDA of $30.7 million. The firm also has 5.8 million shares outstanding and debt of $135 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 Enterprise Value of Rocky Brands by using both multiples. Which estimate is likely to be more accurate? The Enterprise Value of Rocky Brands by using the P/E ratio is $ 179.8 million. (Round to one decimal place.) The Enterprise Value of Rocky Brands by using the EBITDA ratio is $ million. (Round to one decimal place.) Which estimate is likely to be more accurate? (Select from the drop-down menu.) Hint: The more accurate valuation method would take debt into consideration is the more accurate valuation method.
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 $2.30 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.)
Home Demo reports the following: Total liabilities = $38,633 million and Total assets = $42,966 million.(a) Compute Home Demo’s debt ratio.(b) Assuming Lows Hardware (a competitor) has a debt ratio of 60%, which company has higher risk from financial leverage?
Kaye’s Kitchenware has a market/book ratio equal to 1. Itsstock price is $12 per share and it has 4.8 million shares outstanding. The firm’s total capital is $110 million and it finances with only debt and common equity. What is itsdebt-to-capital ratio?
Use the Dupont identity to solve the following. The ABC Inc. has sales of $10,500, total assets of $4600, and equity multiplier of 1.2. If its ROE is 14%, what comes closest to its net income? 398 644 773 875 537
20) Suppose Logan Inc. has earnings per share of $3.45 and EBITDA of $45 million. Logan Inc. also has 5 million shares outstanding and debt of $150 million (net of cash). You believe that John Logistics and Transport (JLT) is comparable to Logan Inc. in terms of its underlying business, but JLT has no debt. JLT has a P/E of 12.5 and an enterprise value to EBITDA multiple of 7. Based upon the enterprise value to EBITDA ratio, the value of a share of Logan Inc. is closest to: a) $33.00. b) $82.50. c) $43.10. d) $21.25.
Halfway There Corp has a profit margin of 4% and an equity multiplier of 1.8. Its sales are $250 million, and it has total assets of $73 million. What is its ROE?
Use the information below to build a properly formatted income statement. A: The firm has 12,640,500 shares outstanding and EPS is $3.20.Calculate Net Income . B: The firm's corporate tax rate is 40%. Calculate the firm's EBT. C: After completing A and B above, what is the firm's corporate tax expense? D: The firm's Revenue is $183,600,000 and its operating margin is 45.00%. Calculate EBIT. E: After completing the above: Gross Profit is 1.65 times its EBIT . Calculate Gross Profit . F: Given the above information, calculate the firm's Operating Expenses . G: Given the above information, calculate the firm's Interest Expense .
A firm has a ROE of 16.875%, asset turnover of 2.5, and an equity multiplier of 1.5. If the firm has sales revenue of $10000, what is its net income?(answer is 1012.5) A firm has cash flow from assets of $200, cash flow to creditors of $125, and $15 of net equity raised. Calculate the amount of dividends paid to shareholders.(answer is 90) What is the firm’s sustainable growth rate?
Triangular Chemicals has total assets of $ 97 million, a return on equity of 3 5 percent, a net profit margin of 4.6 percent, and an equity multiplier of 2. 56. How much are the firm's sales? Round to one decimial place.

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