Identifying Comparables and Valuation using PB and PE

Hot Topic, Inc.'s book value of equity is $229 million and its forward earnings estimate per share is $0.41, or $17 million in total earnings. The following information is also available for Hot Topic and a peer group of companies (identified by ticker symbol) from the specialty retail sector.

Ticker	Market Cap($ mil.)	PB Current	Forward PE (FY1)	EPS 5-Year Historical Growth Rate	ROE (T 4Q)	Debt-to- Equity (Prior Year)
HOTT	--	--	--	(21.2)%	5.9%	0.00
PLCE	$595.1	1.1	14.7	11.8%	8.4%	0.00
JOSB	439.5	1.9	9.1	14.4%	22.5%	0.00
ZUMZ	492.5	3.2	18.5	27.4%	19.8%	0.00
GYMB	1,126.3	5.7	13.0	28.5%	33.5%	0.00
MW	1,217.0	1.5	11.8	28.6%	23.5%	0.11
TWB	437.4	2.5	9.2	4.6%	17.3%	1.02
CBK	375.7	1.6	17.4	(11.6)%	11.8%	0.00
FINL	289.2	0.7	16.3	(7.7)%	(0.1)%	0.00
SSI	515.0	1.0	11.9	(7.1)%	11.0%	0.20
DBRN	751.6	1.5	11.4	(0.7)%	16.9%	0.28

(b) Assume that you use as comparables the following set of companies: CBK, FINL, and SSI. Estimate Hot Topic's equity intrinsic value using the PB ratio from these peer companies. (Round average PB ratio to two decimal places for your calculation. Round your answer to the nearest million.)

$Answer million (c) Use the same comparables as in part (b) and estimate Hot Topic's equity intrinsic value using the PE ratio from these peer companies. (Round average PE ratio to two decimal places for your calculation. Round your answer to the nearest million.)

$Answer million