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Kimberly-Clark, a household product manufacturer, reported earnings per share (EPS) of $3.60 in 1993 and paid dividends per share of $2.00 in that year. The

Kimberly-Clark, a household product manufacturer, reported earnings per share (EPS) of $3.60 in 1993 and paid dividends per share of $2.00 in that year. The firm reported depreciation of $330 million in 1993 and capital expenditures of $520 million. (There were 180 million shares outstanding, trading at $54 per share.) This ratio of capital expenditures to depreciation is expected to be maintained in the long term. Working capital needs are negligible. Kimberly-Clark had debt outstanding of $1.9 billion, and intended to maintain its current financing mix (of debt and equity) to finance future investment needs. The firm was in steady state and earnings were expected to grow 3% a year. The stock had a beta of 0.9. Assume a T-bond rate of 3.25% and an equity risk premium of 5.5%. Estimate the value per share with a FCFE model.

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