Kenneth Cole had 2014 sales of $518 million. You expect sales to grow at 8% next year, but, decline by 1% per year after until you settle to a long-run growth rate of 3%. You expect EBIT to be 8% of sales, increases in net working capital requirements to be 9% of any increase in sales, and net investment to be 8% of any increase in sales. (Note: this is in excess of depreciation).

Other 2014 data for Kenneth Cole

EPS = $1.50

Book value of equity = $10.00 per share

EBITDA = $40 million

Excess Cash = $75 million

Debt = $5 million

Shares outstanding = 15 million

Income tax is 20% of EBIT

WACC = 8%