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Please explain using EXCEL Anya Manufacturing has projected sales of $118 million next year. Costs are expected to be $69.2 million, and net investment is
Please explain using EXCEL
Anya Manufacturing has projected sales of $118 million next year. Costs are expected to be $69.2 million, and net investment is expected to be $13.1 million. Each of these values is expected to grow at 10 percent the following year, with the growth rate declining by 1 percent per year until the growth rate reaches 6 percent, where it is expected to remain indefinitely. There are 5.3 million shares of stock outstanding and investors require a return of 10 percent on the companys stock. The corporate tax rate is 21 percent. | |
a. | What is your estimate of the current stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | Suppose instead that you estimate the terminal value of the company using a PE multiple. The industry PE multiple is 17. What is your new estimate of the companys stock price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
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