17. Using the data contained in Tables 7.20 and 7.21, conduct an evaluation of Superior Technologies' common stock in 2014, using the three different methods specified, as follows: a. The market value of the company's net property has risen, and it is now about two times the value reported in the balance sheet. Calculate the stock price by using its net asset value as a basis. b. Assuming that the company's cost of equity (K) is 16%, determine the stock price by applying the dividend growth model. c. Price to earning (P/E) ratio reflects the general sentiment of the securities mar- ket toward a specific company or the industry in general. Assuming that the average P/E ratio is about 10 for the industry, of which the company is a mem- ber, define the stock price, using the earning model. TABLE 7.20 Income Statement of Superior Technologies Year 2014 Year 2013 (Thousands of Dollars) 91,954 60,776 31,178 13,844 Net Sales Cost of goods and services Gross Profit Selling general, and administrative expenses Employee profit sharing and retirement Total overhead Operating profit before interest and tax Other income EBIT Interest paid Taxable income Income tax Net Income Thousands of Dollars) 193.213 128,434 64,779 26,369 9,831 36,200 28,579 956 29,535 680 28,855 14,712 14,143 18.011 13,167 273 13,440 505 12,935 6,934 6,001 TABLE 7.21 Balance Sheet of Superior Technologies Year 2014 (Thousands of Dollars) 17 856 29,053 23.282 664 -6,013 64,842 60,806 20.083 40.723 Year 2013 (Thousands of Dollars) 10,841 19,350 6,869 315 405 36,970 26,773 10.281 17,492 249 Cash Receivables (net) Inventories Prepaid expenses Payments received on government contracts Total CAS Property, plant, and equipment Accumulated depreciation Net property account Patents, etc. (net) Other assets Total Assets Accounts payable Accrued wages, pensions, taxes, etc. Other CLS Total CLS Long-term debt Preferred stock Common stock Paid in surplus Retained camnings Total Liabilities and Net Worth 105,994 10,368 21,309 5,589 37 266 29,935 3,265 3,915 8.205 23,408 105,994 53,791 5,337 10,696 2,867 18.900 9,250 3.257 6.228 16,156 53,791