Kenneth Cole? (KCP) had sales of $518.0 million in 2005. Based on? KCP's past profitability and investment? needs, you expect EBIT to be 9% of? sales, increases in net working capital requirements to be 10 % of any increase in? sales, and net investment? (capital expenditures in excess of? depreciation) to be 8% of any increase in sales. KCP has $100 million in? cash, $3 million in? debt, 21 million shares? outstanding, a tax rate of 37%?, and a weighted average cost of capital of 11%.

a. Suppose you believe? KCP's initial revenue growth rate will be between 4% and 11%?* ?(*with growth slowing in equal steps to 4% by year? 2011). What range of share prices for KCP is consistent with these? forecasts?

b. Suppose you believe? KCP's EBIT margin will be between 7% and 10% of sales. What range of share prices for KCP is consistent with these forecasts? (keeping KCP's initial revenue growth at 9% with growth slowing in equal steps to 4% by year? 2011)?

c. Suppose you believe? KCP's weighted average cost of capital is between 10% and 12%. What range of share prices for KCP is consistent with these forecasts? (keeping KCP's initial revenue growth and EBIT margin at 9% with growth slowing in equal steps to 4% by year? 2011)?

d. What range of share prices is consistent if you vary the estimates as in parts ?(a?), ?(b?), and ?(c?) ?simultaneously?

Case 1 Case 2 Revenue growth rate 4% 11%?* EBIT margin 7% 10% WACC 10% 12 %

(A) Suppose you believe? KCP's initial revenue growth rate will be between 4% and 11% ?(with growth slowing in equal steps to 4% by year? 2011). What range of share prices for KCP is consistent with these? forecasts? ?(Select the best choice? below.)

A. The range of share prices consistent with these forecasts is from $ 20.51 to $ 25.36.

B.The range of share prices consistent with these forecasts is from $ 28.34$ to $ 22.24$.

C. The range of share prices consistent with these forecasts is from $ 19.59 to $ 27.48.

D.The range of share prices consistent with these forecasts is from $ 25.70 to $ 24.83.

(B). (Part 2 - Select the correct Answer)

Suppose you believe? KCP's EBIT margin will be between 7% and 10% of sales. What range of share prices for KCP is consistent with these forecasts? (keeping KCP's initial revenue growth at 9% with growth slowing in equal steps to 4% by year? 2011)??(Select the best choice? below.)

A.The range of share prices consistent with these forecasts is from $20.51 to $25.36.

B.The range of share prices consistent with these forecasts is from $28.34 to $ 22.24.

C. The range of share prices consistent with these forecasts is from $25.70 to $24.83.

D.The range of share prices consistent with these forecasts is from $19.59 to $27.48.

(C). (Part 2 - Select the correct Answer)

(C) Suppose you believe? KCP's weighted average cost of capital is between 10% and 12%. What range of share prices for KCP is consistent with these forecasts? (keeping KCP's initial revenue growth and EBIT margin at 9% with growth slowing in equal steps to 4% by year? 2011)? ?(Select the best choice? below.)

A.The range of share prices consistent with these forecasts is from $ 20.51 to $ 25.36.

B.The range of share prices consistent with these forecasts is from $ 19.59 to $ 27.48.

C.The range of share prices consistent with these forecasts is from $ 25.70 to $ 24.83.

D.The range of share prices consistent with these forecasts is from $ 28.34 to $ 22.24.

(D.) What range of share prices is consistent if you vary the estimates as in parts ?(a?), ?(b?), and ?(c?) ?simultaneously? That? is: Case 1 Case 2 Revenue growth rate 4% 11%?* EBIT margin 7% 10% WACC 10% 12 % (Select the best choice? below.)

A.The range of share prices consistent with these forecasts is from $ 20.51 to $ 25.36.

B.The range of share prices consistent with these forecasts is from $ 25.70 to $$24.83.

C.The range of share prices consistent with these forecasts is from $19.59 to $27.48.

D.The range of share prices consistent with these forecasts is from $ 28.34 to $22.24.

(Kindly provide excel file for solution so calculation steps and formulae can be looked at)