Question
Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to
Pearl Corp. is expected to have an EBIT of $2,900,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $130,000, and $170,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $15,000,000 in debt and 1,300,000 shares outstanding. At Year 5, you believe that the company's sales will be $23,840,000 and the appropriate price-sales ratio is 2.1. The companys WACC is 8.5 percent and the tax rate is 21 percent. |
What is the price per share of the company's stock? |
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