Suppose Rocky Shoes and Boots has earnings per share of $2.30 and EBITDA of $30.7 million. The
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Suppose Rocky Shoes and Boots 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 Shoes and Boots 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 Shoes and Boots stock using both multiples. Which estimate is likely to be more accurate?
Corporation A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Plan Estimate the values of the stocks of Rocky Shoes and Boots and Deckers Outdoor Corpo...View the full answer
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