Perl Corp is expected to have an EBIT of $2,300,000 next year. Depreciation, the increase in...

Perl Corp is expected to have an EBIT of $2,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $100,000, and $140,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $12,000,000 in debt and 1,000,000 shares outstanding. After yea 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company's WACC is 8.8 percent and tax rate is 25 percent.

What is the price per share of the company's stock?

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Pearl Corp. is expected to have an EBIT of $2,300,000 next year. Depreciation, the increase in...

Pearl Corp. is expected to have an EBIT of $2,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $100,000, and $140,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $12,000,000 in debt and 1,000,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The company’s WACC is 8.8 percent and the...

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...

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...

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...

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...

Pearl Corp. is expected to have an EBIT of $2,500,000 next year. Depreciation, the increase in...

Pearl Corp. is expected to have an EBIT of $2,500,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $110,000, and $150,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $13,000,000 in debt and 850,000 shares outstanding. At Year 5, you believe that the company's sales will be $17,930,000 and the appropriate price-sales ratio is 2.7. The company’s WACC is 9.1 percent...

Subjects