Part II The Company expects its sales to grow at a 20% rate in 2024 but given the competition and regulatory environment this growth rate will slow by 2% per year to a long-run growth rate for the industry of 2% by 2034. Novatech estimates its earnings before tax to be 15% of sales. The investment in net working capital requires to be 8% of any increase in sales, and capital expenditures 4% with depreciation expenses of 5% of the sales. The tax rate is 28%. Novatech has $125 million in cash, no debt, and an unlevered cost of equity of 14%.

1. What is the value of the terminal value in 2034?

2. What is the present value of the terminal value in late 2023?

3. What is the present value of the free cash flows in late 2023?

4. What is the value of Novatech in late 2023?

5. If the company issues 25 million shares, what would be the price per share?