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Denny corp is expected to have an EBIT of $21.1 million next year. Increases in depreciation, the increae in net working capital, and capital spending
Denny corp is expected to have an EBIT of $21.1 million next year. Increases in depreciation, the increae in net working capital, and capital spending are expected to be $165,000, and $120,000 respectively. All are expected to grow at 18 percent per year for four years. The company currently has $104 million in debt and 750,000 shares outstanding. The company's wacc is 8.5 percent and the tax rate is 21 percent. You decide to calculate the terminal value of the company with the price-sales ratio. You believe that year 5 sales will be $23.7 million and the appropriate price-sales ratio is 2.9. What is the price per share of the company's stock
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