Question
Dewey Corp. is expected to have an EBIT of $3,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to
Dewey Corp. is expected to have an EBIT of $3,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $265,000, $170,000, and $270,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $21,500,000 in debt and 880,000 shares outstanding. At Year 5, you believe that the company's sales will be $29,100,000 and the appropriate price-sales ratio is 2.6. The companys WACC is 8.9 percent and the tax rate is 22 percent. What is the price per share of the company's stock? |
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