Corp

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.

The today's value of ABC Corp. is closest to:

a. $48.36

b. $50.86

c. $61.57

d. $64.71