Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Pearl Corp. is expected to have an EBIT of $2,300.000 next year. Depreciation, the increase in net working capital, and capital spending are expected to
Pearl Corp. is expected to have an EBIT of $2,300.000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $100,000, and $140,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $12,000,000 in debt and 1,000,000 shares outstanding. At Year 5. you believe that the company's sales will be $18,910,000 and the appropriate price-sales ratio is 2.5. The company's WACC is 8.8 percent and the tax rate is 25 percent. What is the price per share of the company's stock? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Share price
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started