Suppose Rocky Brands has earnings per share of $2.30 and EBITDA of $30.7 million. The firm also

Question:

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 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?
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...