Question
Funny Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to
Funny Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $45,000, $9,000, and $40,000, respectively.
All cash flow items are expected to grow at 6 percent per year for two years. After Year 3, the CFA will stay the same indefinitely.
The company currently has $3.5 million in debt and 250,000 shares outstanding. The company's WACC is 9.5 percent and the tax rate is 20 percent.
What is the price per share of the company's stock?
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Fundamentals Of Healthcare Finance
Authors: Paula H. Song, Kristin L. Reiter
4th Edition
1640553223, 978-1640553224
