PLEASE SHOW WORK

Lowell Information Technology, inc (LIT) had sales of $40.2 billion in 2009. Suppose you expect its sales to grow at a rate of 10% in 2013, but then slow by 1% per year to the long-run growth rate that is characteristic of the high-tech industry5%by 2018. Based on LITs past profitability an investment needs, you expect EBIT to be 10% of sales, increases in net working capital requirements to be 10% of any increase in sales, and capital expenditures to equal depreciation expenses.

2.a) If LIT has $2.3 billion in cash, $1.5 billion in debt, 793.6 million shares outstanding, a tax rate of 34%, and a weighted average cost of capital of 10%, what is your estimate of the value of LITs stock in early 2013?

2.b) What is your estimate of the value of LITs stock in early 2013 if the long-run growth rate is 4% after 2018?

2.c) What is your estimate of the value of LITs stock in early 2013 if a weighted average cost of capital of 8%?