Question
CSN reported net income of $100 million last year.CSN expects net income to grow at 7% next year, at 5% in the following year, and
CSN reported net income of $100 million last year.CSN expects net income to grow at 7% next year, at 5% in the following year, and then at a constant rate of 3.5% per year forever.CSN expects that its current ROE will remain constant forever.CSN has a book value of equity of $1,000 million and a book value of debt of $1,500 million.CSNs industry has a cost of equity of 6.5%, has a book value debt to equity ratio of 0.50, has a tax rate of 35%, and has a cost of debt of 4.75%.CSN has a tax rate of 40% and has a cost of debt of 5.25%.CSN has 50 million shares outstanding.Find CSNs stock price using the FCFE method.
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