Marc Dodier is a recent university grad firm of Lippman, Brickbats, and Shaft. Marc has been following one of the hottest issues on Street, C&I Medical Supplies, a company that has turned in an and, even more important, has exhibited uate and a security analyst with the Kansas City brokerage lately excellent growth potential. It has five million shares to assess its investment potential. Assume the company's sales for the past outstanding performa outstanding and pays a nominal annual dividend of $0.05 per share. Marc has decided to take a closer look at C&I five years have been as follows: Year 2012 2013 2014 2015 2016 Sales (S millions) $10.0 $12.5 $16.2 $22.0 $28.5 Marc is concerned with the future prospects of the company, not its past. As a result, he pores over the numbers and generates the following estimates of future performance: 1296 5 No Expected net profit margin Estimated annual dividends per share Number of common shares outstanding P/E ratio at the end of 2017 P/E ratio at the end of 2018 change 35 50 Questions a. Determine the average annual rate of growth in sales over the past five years. (Assume sales rate to forecast revenues for next year (2017) and the year after the company's net earnings and EPS for each of the next two years (2017 year period. in 2011 amounted to $7.5 million.) 1. Use this average growth that (2018). 2. Now determine and 2018). Finally, determine the expected future price of the stock at the end of this two- 3. Because of several intrinsic and market factors, Marc feels that 25 for a desired rate of return. I. Using the 25% rate of return and the forecasted figures b. % is a viable figure to use you came up with in question a, compute the stock's justified price. os at $32.50 per share, should Mare consider the stock a worth- while investment candidate? Explain