Question
In: Finance
Pearl Corp. is expected to have an EBIT of $2,300,000 next year. Depreciation, the increase in...
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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 tax rate is 25 percent. |
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What is the price per share of the company's stock? |
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Expert Solution
Calculate the price per share of the stock as follows:
Therefore, the value per share is $35.54.
Formulas:
jeff jeffy answered 1 year agoRelated Solutions
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...
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...
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...
Pearl Corp. is expected to have an EBIT of $3,000,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $3,000,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $135,000, and $175,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $15,500,000 in debt and
1,350,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3.5 percent indefinitely. The
company’s WACC is 8.6 percent and the...
Pearl Corp. is expected to have an EBIT of $3,200,000 next year. Depreciation, the increase in...
Pearl 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 $160,000, $145,000, and $185,000,
respectively. All are expected to grow at 16 percent per year for
four years. The company currently has $16,500,000 in debt and
1,150,000 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...
Pearl Corp. is expected to have an EBIT of $2,600,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $2,600,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $115,000, and $155,000,
respectively. All are expected to grow at 16 percent per year for
four years. The company currently has $13,500,000 in debt and
1,150,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3 percent indefinitely. The
company’s WACC is 9.2 percent and the...
Pearl Corp. is expected to have an EBIT of $2,400,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $2,400,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $105,000, and $145,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $12,500,000 in debt and
1,050,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3.5 percent indefinitely. The
company’s WACC is 8.9 percent and the...
Pearl Corp. is expected to have an EBIT of $3,500,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $3,500,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $160,000, and $200,000,
respectively. All are expected to grow at 19 percent per year for
four years. The company currently has $18,000,000 in debt and
1,600,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3 percent indefinitely. The
company’s WACC is 9.2 percent and the...
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...
Pearl Corp. is expected to have an EBIT of $3,300,000 next year. Depreciation, the increase in...
Pearl Corp. is expected to have an EBIT of $3,300,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $150,000, and $190,000,
respectively. All are expected to grow at 17 percent per year for
four years. The company currently has $17,000,000 in debt and
1,500,000 shares outstanding. At Year 5, you believe that the
company's sales will be $25,350,000 and the appropriate price-sales
ratio is 2.5. The company’s WACC is 8.9 percent...
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