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28. Adjusted Cash Flow from Assets (L04) You have looked at the current financial statements for Kent Homes Co. In the year that just ended,
28. Adjusted Cash Flow from Assets (L04) You have looked at the current financial statements for Kent Homes Co. In the year that just ended, the company had an EBIT of $2.95 million. Depreciation, the increase in net working capital, and capital spending were $235,000, $ 105,000, and $475,000, respectively. You expect that over the next five years, EBIT will grow at 15% per year, depreciation and capital spending will grow at 20% per year, and NWC will grow at 10% per year. The company has $19.5 million in debt and 400,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.5% indefinitely. The company's WACC is 9.25%, and the tax rate is 35%. What is the price per share of the company's stock
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