Navarro had sales of $830 million in 2012. Suppose you expect its sales to grow at an 10% rate in 2013, but that this growth rate will slow by 2% per year to a long-run growth rate for the industry of 2% by 2016. Based on Navarro?s past profitability and investment needs, you expect EBIT to be 10% of sales, increases in net working capital requirements to be 8% of any increase in sales, and capital expenditures to equal depreciation expenses.If Navarro has $125 million in cash, $10 million in debt, 25 million shares outstanding, a tax rate of 35%, and a weighted average cost of capital of 12.0%.

a.What is your estimate of the value of Navarro?s stock in early 2013?

b.What is the value of equity and price per share if the unlevered cost of equity is 14%?

Navarro had sales of $830 million in 2012. Suppose you expect its sales to grow at an 10% rate in 2013, but that this growth rate will slow by 2% per year to a long-run growth rate for the industry of 2% by 2016. Based on Navarro's past profitability and investment needs, you expect EBIT to be 10% of sales, increases in net working capital requirements to be 8% of any increase in sales, and capital expenditures to equal depreciation expenses. If Navarro has $125 million in cash, $10 million in debt, 25 million shares outstanding, a tax rate of 35%, and a weighted average cost of capital of 12.0%. a. What is your estimate of the value of Navarro's stock in early 2013? b. What is the value of equity and price per share if the unlevered cost of equity is 14%