Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in net working capital, and capital spending are expected
Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $240,000, $145,000, and $245,000, respectively. All are expected to grow at 20 percent per year for four years. The company currently has $19,000,000 in debt and 855,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.3 percent indefinitely. The company's WACC is 9.6 percent and the tax rate is 22 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To find the price per share of the companys stock we will use the free cash flow to equity FCFE appr...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started