Question

In: Finance

Problem 12-25 Adjusted Cash Flow From Assets [LO3] Ward Corp. is expected to have an EBIT...

Problem 12-25 Adjusted Cash Flow From Assets [LO3]

Ward Corp. is expected to have an EBIT of $2,450,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $176,000, $107,000, and $126,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $18,500,000 in debt and 810,000 shares outstanding. At Year 5, you believe that the company's sales will be $17,000,000 and the appropriate price–sales ratio is 2.2. The company’s WACC is 9.1 percent and the tax rate is 35 percent.

What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Share price            $

Solutions

Expert Solution

Formulae

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Problem 12-26 Adjusted Cash Flow From Assets [LO3] You have looked at the current financial statements...
Problem 12-26 Adjusted Cash Flow From Assets [LO3] You have looked at the current financial statements for Reigle Homes, Co. The company has an EBIT of $2,890,000 this year. Depreciation, the increase in net working capital, and capital spending were $227,000, $92,000, and $425,000, respectively. You expect that over the next five years, EBIT will grow at 18 percent per year, depreciation and capital spending will grow at 23 per year, and NWC will grow at 13 per year. The...
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...
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...
Ward Corp. is expected to have an EBIT of $2,050,000 next year. Depreciation, the increase in...
Ward Corp. is expected to have an EBIT of $2,050,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $168,000, $91,000, and $118,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $14,500,000 in debt and 830,000 shares outstanding. At Year 5, you believe that the company's sales will be $16,200,000 and the appropriate price–sales ratio is 2.3. The company’s WACC is 8.3 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 $2,750,000 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. After Year 5, the adjusted cash flow from assets is expected to grow at 3.0 percent indefinitely. The company’s WACC is 9.3 percent and the...
Ward Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase...
Ward Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $165,000, $85,000, and $115,000, 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 3 percent indefinitely. The company’s WACC is 8.5 percent...
Ward Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase...
Ward Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $165,000, $85,000, and $115,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13,000,000 in debt and 800,000 shares outstanding. At Year 5,th adjusted cash flow from assets is expected to grow at 3% indefinitely. The company’s WACC is 8.5 percent and the tax...
Cash Flow From Assets Problem: Calculate each step of the cash flow from assets based on...
Cash Flow From Assets Problem: Calculate each step of the cash flow from assets based on the following information. Use the examples in the presentation as a guide. Working Capital Accounts: 2015: Current Assets = 4,400; Current Liabilities = 1,500 2014: Current Assets = 3,500; Current Liabilities = 1,200 Fixed Assets and Depreciation: 2015: Net Fixed Assets = 3,400 2014: Net Fixed Assets = 3,100 Depreciation Expense = 400 Long-Term Debt and Equity: 2015: Long-Term Debt = 4,000; Common Stock...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT