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Ocala Company s stock is currently selling for $ 1 8 per share. At the end of the year, the company plans to pay a

Ocala Companys stock is currently selling for $18 per share. At the end of the year, the company plans to pay a
dividend equal to $2.34 per share. For the remainder of the companys life, dividends are expected to grow at a
constant rate, and investors are expected to require a 17 percent return to invest in Ocalas stock. What should be
the value of Ocalas stock five years from now?
10. Backhaus Beer Brewers (BBB) just announced that the current fiscal years net income was $1.2 million. BBBs
marginal tax rate is 40 percent, its interest expense for the year was $1.5 million, it has $15 million of invested
capital, and its average cost of funds was 18 percent. What is BBBs economic value added (EVA) for the current
year?
value of URs firms stock?

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