Compute the the theoretical price per share of a firm using the following information: 1. Next year revenues = $700,000. 2. Growth in revenues during the years 1-4 -20%. After year 5 growth is = 3. Next year operating expenses = $1,200,000 4. Growth in operating expenses during the years 1-5 -2%. After year 5 growth is = 1% 5. Capital expenditures (purchase of a machine) - $400,000 6. Borrow $50,000 in a loan with interest rate 2.5% (assume you pay the same Sinterests every year, forever). 7. The machine is depreciated over 4 years using straight line depreciation. 8. Taxes - 20% 9. Working capital -5% of revenues 10. Price per share - $5 11. Number of shares - 20,000 12. Beta - 1.0 13. Risk free rate - 2.00% 14. Market risk premium = 7% Question: What is the theoretical value of the equity and the theoretical price per share using this value of equity. 28.4 149 501