1. America Corp. is considering going public. As an investment banker, you estimate the firm's projected sales for next year to be $100 million, operating cash costs to be $60 million, depreciation to be $4 million and net investment to be $15 million. Each of these values is expected to grow at 12% the following year, with the growth rate declining by 2% per year until the growth rate reaches 8%, where it is expected to remain indefinitely. There will be 5 million shares of stock outstanding after the offering and investors require a return of 12% on the company's stock. The corporate tax rate is 21%. a. What is your estimate of the IPO price? b. Suppose instead that you estimate the value of the company using a P/E multiple. The P/E multiple for recent IPOs in the industry is 15 . What is your estimate of the company's IPO price