Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dewey Corp. is expected to have an EBIT of $3,400,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to

image text in transcribed
Dewey Corp. is expected to have an EBIT of $3,400,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $275,000, $180,000, and $280,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $22,500,000 in debt and 890,000 shares outstanding At Year 5, you believe that the company's sales will be $29,300,000 and the appropriate price-sales ratio is 2.8. The company's WACC IS 92 percent and the tax rate is 24 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 $ 45.40

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Ascendancy Of Finance

Authors: Joseph Vogl, Simon Garnett

1st Edition

1509509305, 978-1509509300

More Books

Students also viewed these Finance questions

Question

=+What is your intention in communicating this message?

Answered: 1 week ago