In addition to footwear, Kenneth Cole Productions designs and sells handbags, apparel, and other accessories....
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In addition to footwear, Kenneth Cole Productions designs and sells handbags, apparel, and other accessories. You decide, therefore, to consider comparables for KCP outside the footwear industry. You also know the following about KCP: it has sales of EBITDA of 55.6 million, excess cash of 100 million, 3 million of debt, EPS of 1.65, book value of 12.05 equity of per share, and 21 million shares outstanding.
a. Suppose that Fossil, Inc., has an enterprise value to EBITDA multiple of 11.86 and a P/E multiple of 17.96. What share price would you estimate for KCP using each of these multiples, based on the data for KCP?
b. Suppose that Tommy Hilfiger Corporation has an enterprise value to EBITDA multiple of 7.17 and a P/E multiple of 16.87 . What share price would you estimate for KCP using each of these multiples based on the data for KCP?
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