Cleanlab Inc. sells chemicals and systems for cleaning, sanitizing, and maintenance. It recently reported earnings per share of $2.55 and expects earnings growth of 8% a year for the next two years and 4% a year after that. The capital expenditure per share was $2.15, depreciation was $1.05 per share, and working capital expenditure was $0.25 per share and all three are expected to grow at the same rate as earnings. The firm has a target debt ratio of 40%, the stocks beta is 1.20, the risk-free rate is 3.0% and the equity risk premium is 6%.

36. Calculate intrinsic value per share for Cleanlab Inc. using the FCFE model.

1. $31.41
2. $32.22
3. $32.97
4. $33.41

37. Assume rather than earnings growth remaining constant at 4% after Year 2 that it instead declines linearly from 8% to 4% over the next 10 years and then remains at 4% into perpetuity. Calculate intrinsic value per share for Cleanlab Inc. using the FCFE model based on this new assumption.

1. $34.99
2. $36.80
3. $37.95
4. $38.33