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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
jeff jeffy answered 2 years agoRelated 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...
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