Question
Stark Corporation reported EBITDA of $1290 million in 2021 and depreciation charges of $400 million. The firm expects revenues, earnings, capital expenditures, net working capital,
Stark Corporation reported EBITDA of $1290 million in 2021 and depreciation charges of $400 million. The firm expects revenues, earnings, capital expenditures, net working capital, and depreciation to grow at 9.5% a year from 2022 to 2026, after which the firms cash flows will grow with 2% growth rate indefinitely. Capital Expenditures are estimated to be $493m in 2022 and working capital will be $90 million. The tax rate for the firm is 21%. A.) Estimate the value of the firm. B.) Estimate the value of the equity in the firm and the value per share.
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