5. Compute the equity share price for LED Light Co. using the information below: LED Light Co. expects sales of $975 million in 2018. Operating margin = 33%, Net profit margin = 9%, Interest rate = 6%, Tax rate = 35% Depreciation expense = $25 million, CAPEX = $15 million , no changes in NWC Dividend yield = 3.5%, Dividend payout rate = 40% Risk free rate = 2%, E(Rm) = 10%, shares out = 60 million Total debt (book value) = $1245 million, interest rate = 6%, WACC =9% Cash on hand = $110 million, Equity beta = 1.25

Sales, earnings and dividends are expected to grow at a constant 3.0% growth rate