Assuming unlevered beta of the company is 1.5, risk-free rate of 5%, and MRP of 6%. That given, solve for questions 1 - 4 using the information attached from the picture.

1) What is the weighted average cost of capital of the company? Hint you need to calculate levered cost of equity to get WACC. 2) What is your estimate of the value of Ross-Simon's stock in early 2019? 3) What is the value of equity and price per share? 4) Use adjusted present value (APV) to estimate price per share.

Ross-Simon Company had sales of S630 million in 2018. The Company expects its sales to grow at 28% rate in 2019, but that this growth rate will drop slowly by 4% per year to a long-run growth rate for the industry of4% by 2025. Ross-Simon has been profitable, and it expects its EBIT to be 10% of sales, increases in net working capital requirements to be 8% of any increase in sales. Its capital investment is 6% of sales and depreciation expense is 3% of sales. The company plans to finance its capital investment of the first two years with $100 debt with interest rate of 8% and continuing to finance the future investment annually. The company has estimated its stock price, under executive incentive stock option plans, to be $30.00 per share. The S30 value was calculated by X EPS industry using the industry multiple-of carnings approach (shown below) common in the retail industry Ross Simon has $125 million in cash and the unlevered cost of equity of 14%. The company has 25 million shares outstanding with a tax rate of 21%. Ross-Simon Company had sales of S630 million in 2018. The Company expects its sales to grow at 28% rate in 2019, but that this growth rate will drop slowly by 4% per year to a long-run growth rate for the industry of4% by 2025. Ross-Simon has been profitable, and it expects its EBIT to be 10% of sales, increases in net working capital requirements to be 8% of any increase in sales. Its capital investment is 6% of sales and depreciation expense is 3% of sales. The company plans to finance its capital investment of the first two years with $100 debt with interest rate of 8% and continuing to finance the future investment annually. The company has estimated its stock price, under executive incentive stock option plans, to be $30.00 per share. The S30 value was calculated by X EPS industry using the industry multiple-of carnings approach (shown below) common in the retail industry Ross Simon has $125 million in cash and the unlevered cost of equity of 14%. The company has 25 million shares outstanding with a tax rate of 21%