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c. The price of ABC based on the average value of the enterprise value / sales multiple is close to $34

d. Using the average value of the P/E multiple you could establish a range for the fair price of ABC

Name Share price ($) Time left 1:12:34 Trophy Ente Price/Book Value/Sale value Enterprise Market value ($ P/E capitalization milion) ($ million) 21,830 20,518 16.64 6,088 4,593 14.99 3,514 3,451 14.91 Nike 84.2 Puma AG 200 Reebok 58.72 Wolverine 22.1 World Wide 3.59 5.02 2.41 1.43 2.19 0.9 8.75 9.02 8.58 1,257 1,253 17.42 2.71 2.3 9.53 Brown Shoe 43.36 800 1,019 22.62 1.91 0.47 9.09 Sketchers 11.07 900 614 17.63 2.02 0.62 6.88 497 524 20.72 1.87 0.89 9.28 Stride Rite 13.7 Deckers 30.05 Outdoor LaCross 34 Footwear 373 367 13.32 2.29 1.48 7.44 567 75 9.07 1.28 0.76 8.3 In January 2006 company ABC had sales equal to $867 milion, excess cash of $320 milion, $12 milion of debt and $45 milion shares outstanding. EPS amounted to 3.65.Comparable firms in the same industry are summarized in the above table. For the upcoming year, managers at ABC are planning to repurchase $5 million shares. Mark the statement that is correct: Select one: O a. The price of ABC based on the average value of the enterprise value / sales multiple is close to $30 O b. using the valuation method based on multiples, the stock of ABC is overvalued than comparable firms Name Share price ($) Time left 1:12:34 Trophy Ente Price/Book Value/Sale value Enterprise Market value ($ P/E capitalization milion) ($ million) 21,830 20,518 16.64 6,088 4,593 14.99 3,514 3,451 14.91 Nike 84.2 Puma AG 200 Reebok 58.72 Wolverine 22.1 World Wide 3.59 5.02 2.41 1.43 2.19 0.9 8.75 9.02 8.58 1,257 1,253 17.42 2.71 2.3 9.53 Brown Shoe 43.36 800 1,019 22.62 1.91 0.47 9.09 Sketchers 11.07 900 614 17.63 2.02 0.62 6.88 497 524 20.72 1.87 0.89 9.28 Stride Rite 13.7 Deckers 30.05 Outdoor LaCross 34 Footwear 373 367 13.32 2.29 1.48 7.44 567 75 9.07 1.28 0.76 8.3 In January 2006 company ABC had sales equal to $867 milion, excess cash of $320 milion, $12 milion of debt and $45 milion shares outstanding. EPS amounted to 3.65.Comparable firms in the same industry are summarized in the above table. For the upcoming year, managers at ABC are planning to repurchase $5 million shares. Mark the statement that is correct: Select one: O a. The price of ABC based on the average value of the enterprise value / sales multiple is close to $30 O b. using the valuation method based on multiples, the stock of ABC is overvalued than comparable firms

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