Corp.
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Year 0
Cash & equivalents $40 million
Interest expense $7.2 million
Capital Expenditures per share $2.4
Working Capital Investment per share $1.7
Market Value of Equity per share $56
Target debt ratio 30%
Cost of equity (CAPM) 12%
Depreciation (per share) $1.8
Tax rate 37.5%
Net Income (earnings) per share $5
Shares outstanding 5 million
Earnings, capex, depreciation and working capital will all grow at 5% in the future.

Q4: If ABC Corp is currently selling for $56, the stock (based on our analysis) is:
a. Overvalued
b. Undervalued
c. Correctly valued
d. Cannot be determined