Question
Question 2 Dewey Corp. is expected to have an EBIT of $2,700,000 next year. Depreciation, the increase in net working capital, and capital spending are
Question 2 Dewey Corp. is expected to have an EBIT of $2,700,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $205,000, $110,000, and $210,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $15,500,000 in debt and 820,000 shares outstanding. At Year 5, you believe that the company's sales will be $27,900,000 and the appropriate price-sales ratio is 2.6. The companys WACC is 8.8 percent and the tax rate is 25 percent. What is the price per share of the company's stock?
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