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6 ) Quinton Johnston is evaluating NYL Manufacturing Company, Ltd . In 2 0 1 7 , when Johnston is performing his analysis, the company
Quinton Johnston is evaluating NYL Manufacturing Company, Ltd In when Johnston is performing his analysis, the company is unprofitable. Furthermore, NYL pays no dividends on its common shares. Johnston decides to value NYL Manufacturing by using his forecasts of FCFE. Johnston gathers the following facts and assumptions: The company has billion shares outstanding. Sales will be $ billion in increasing at percent annually for the next four years through Net income will be percent of sales. Investment in fixed assets will be percent of sales; investment in working capital will be percent of sales; depreciation will be percent of sales. percent of the net investment in assets will be financed with debt. Interest expenses will be only percent of sales. The tax rate will be percent. NYL Manufacturings beta is ; the riskfree government bond rate is percent; the equity risk premium is percent. At the end of Johnston projects NYL terminal stock value at times earnings. What is the value of one ordinary share of NYL Manufacturing Company?
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