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Assume that this is the beginning of the year 2021. In the year that just ended (i.e. the year 2020), KCP had sales of $800
Assume that this is the beginning of the year 2021. In the year that just ended (i.e. the year 2020), KCP had sales of $800 million. Suppose you expect sales to grow at a 7% rate in 2021, but that this growth will slow by 1% per year to a long-term growth rate for the apparel industry of 3% by 2025. Based on KCP's past profitability and investment needs, you expect EBIT to be 9% of sales. Increases in net working capital requirements would be 10% of any increase in sales. Net capital expenditure (capital expenditures in excess of depreciation) would be 8% of any increase in sales. KCP has $87 million in cash, $35 million in debt, 26 million shares outstanding, a tax rate of 35%, and a weighted average cost of capital of 8%. What is your estimate of the KCP's value per share in early 2021? Input your response rounded to two decimal points but without the dollar sign. Assume that this is the beginning of the year 2021. In the year that just ended (i.e. the year 2020), KCP had sales of $800 million. Suppose you expect sales to grow at a 7% rate in 2021, but that this growth will slow by 1% per year to a long-term growth rate for the apparel industry of 3% by 2025. Based on KCP's past profitability and investment needs, you expect EBIT to be 9% of sales. Increases in net working capital requirements would be 10% of any increase in sales. Net capital expenditure (capital expenditures in excess of depreciation) would be 8% of any increase in sales. KCP has $87 million in cash, $35 million in debt, 26 million shares outstanding, a tax rate of 35%, and a weighted average cost of capital of 8%. What is your estimate of the KCP's value per share in early 2021? Input your response rounded to two decimal points but without the dollar sign
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