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Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase in net working capital, and capital spending are expected

Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $180,000, $85,000, and $185,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13 million in debt and 800,000 shares outstanding. The companys WACC is 9.1 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 $27.4 million and the appropriate price-sales ratio is 1.9. What is your estimate of the current share price?

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