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( 1 5 points ) AGE Corporation had sales of $ 4 0 0 million last year. The firm has a WACC of 1 5

(15 points) AGE Corporation had sales of $400 million last year. The firm has a WACC of
15%, which it is expected to be the same in the future. The current estimated cost of debt is
8%. AGE Corp has an outstanding perpetual bond that pays 4% interest annually and has a
face value of $50 million. The firm has an excess cash of $125 million and intends to keep
that amount of excess cash in the future. It has outstanding shares of 20 million. Safe
assumptions regarding the next five years are given below (Depreciation expenses and
CAPEX are measured as a percentage of sales, where the change in NWC is a result of the
changes in sales). It is expected that the firm will enter a stable stage starting in the sixth year
and the FCFs will grow by 5% annually. The corporate tax rate is 30 percent. What is your
estimate of the current stock price?
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