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Question 2 Dewey Corp. is expected to have an EBIT of $2,700,000 next year. Depreciation, the...
Question 2 Dewey Corp. is expected to have an EBIT of $2,700,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $205,000, $110,000, and $210,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $15,500,000 in debt and 820,000 shares outstanding. At Year 5, you believe that the company's sales will be $27,900,000 and the appropriate price-sales ratio is 2.6. The company’s WACC is 8.8 percent and the tax rate is 25 percent. What is the price per share of the company's stock?
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jeff jeffy answered 2 years agoRelated Solutions
Dewey Corp. is expected to have an EBIT of $3,250,000 next year. Depreciation, the increase in...
Dewey Corp. is expected to have an EBIT of $3,250,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $260,000, $165,000, and $265,000,
respectively. All are expected to grow at 18 percent per year for
four years. The company currently has $21,000,000 in debt and
875,000 shares outstanding. At Year 5, you believe that the
company's sales will be $29,000,000 and the appropriate price-sales
ratio is 2.5. The company’s WACC is 8.8 percent...
Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in...
Dewey Corp. is expected to have an EBIT of $3,050,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $240,000, $145,000, and $245,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $19,000,000 in debt and
855,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3.3 percent indefinitely. The
company’s WACC is 9.6 percent and the...
Dewey Corp. is expected to have an EBIT of $3,350,000 next year. Depreciation, the increase in...
Dewey Corp. is expected to have an EBIT of $3,350,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $270,000, $175,000, and $275,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $22,000,000 in debt and
885,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 2.7 percent indefinitely. The
company’s WACC is 9.1 percent and the...
Dewey Corp. is expected to have an EBIT of $3,200,000 next year. Depreciation, the increase in...
Dewey Corp. is expected to have an EBIT of $3,200,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $255,000, $160,000, and $260,000,
respectively. All are expected to grow at 17 percent per year for
four years. The company currently has $20,500,000 in debt and
870,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 2.4 percent indefinitely. The
company’s WACC is 8.7 percent and the...
Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase...
Dewey Corp. is expected to have an EBIT of $2.45 million next
year. Depreciation, the increase in net working capital, and
capital spending are expected to be $180,000, $85,000, and
$185,000, respectively. All are expected to grow at 18 percent per
year for four years. The company currently has $13 million in debt
and 800,000 shares outstanding. After Year 5, the adjusted cash
flow from assets is expected to grow at 2.5 percent indefinitely.
The company’s WACC is 9.1 percent...
Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase...
Dewey Corp. is expected to have an EBIT of $2.45 million next
year. Depreciation, the increase in net working capital, and
capital spending are expected to be $180,000, $85,000, and
$185,000, respectively. All are expected to grow at 18 percent per
year for four years. The company currently has $13 million in debt
and 800,000 shares outstanding. After Year 5, the adjusted cash
flow from assets is expected to grow at 2.5 percent indefinitely.
The company’s WACC is 9.1 percent...
Ward Corp. is expected to have an EBIT of $2,750,000 next year. Depreciation, the increase in...
Ward Corp. is expected to have an EBIT of $2,750,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $182,000, $119,000, and $132,000,
respectively. All are expected to grow at 19 percent per year for
four years. The company currently has $21,500,000 in debt and
820,000 shares outstanding. At Year 5, you believe that the
company's sales will be $17,600,000 and the appropriate price–sales
ratio is 2.8. The company’s WACC is 9.3 percent...
Pearl Corp. is expected to have an EBIT of $3,400,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $3,400,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $155,000, and $195,000,
respectively. All are expected to grow at 18 percent per year for
four years. The company currently has $17,500,000 in debt and
1,350,000 shares outstanding. At Year 5, you believe that the
company's sales will be $27,030,000 and the appropriate price-sales
ratio is 2.6. The company’s WACC is 9.1 percent...
Ward Corp. is expected to have an EBIT of $2,100,000 next year. Depreciation, the increase in...
Ward Corp. is expected to have an EBIT of $2,100,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $169,000, $93,000, and $119,000,
respectively. All are expected to grow at 18 percent per year for
four years. The company currently has $15,000,000 in debt and
840,000 shares outstanding. At Year 5, you believe that the
company's sales will be $16,300,000 and the appropriate price–sales
ratio is 2.4. The company’s WACC is 8.4 percent...
Ward Corp. is expected to have an EBIT of $2,650,000 next year. Depreciation, the increase in...
Ward Corp. is expected to have an EBIT of $2,650,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $180,000, $115,000, and $130,000,
respectively. All are expected to grow at 17 percent per year for
four years. The company currently has $20,500,000 in debt and
850,000 shares outstanding. At Year 5, you believe that the
company's sales will be $17,400,000 and the appropriate price?sales
ratio is 2.6. The company’s WACC is 9.5 percent...
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