ulio de la Renta, an analyst at Blackwell Investment group is preparing a dividend forecast for

Yokohama Industries for the next five years. Julio uses the following model assumptions:

Sales are $$100$ million in the first year. Sales are expected to grow by $23\%$ in the second year, $18\%$ in

year three, and $8\%$ in years $4$ and $5.$ Earnings before interest and taxes $($EBIT$)$ are $25\%$ of sales in the

first and second years, respectively. EBIT is $20\%$ of sales in the third year, and $18\%$ of sales in Years

$4$ and $5.$ Interest charges are $10\%$ of total debt for the current year. The income tax rate is $21\%.$

Yokohama pays out $20\%$ of earnings in dividends in the first and second years, $30\%$ in the third year,

$40\%$ in Year $4,$ and $50\%$ in the fifth year. Retained earnings are added to equity in the following year.

Total assets are $80\%$ of the current year$$s sales in all years. In the first year, debt is $40$ million and

shareholder$$s equity is $$40$ million. Debt equals total assets less shareholders$$ equity. Shareholders$$

equity will equal prior year$$s shareholders$$ equity plus the addition to retained earnings from the prior

year. Yokohama has $4$ million shares outstanding. The risk$-$free rate is $2\mathrm{.}3\%.$ The shares of Yokohama

have an estimated beta of $1\mathrm{.}25,$ and the equity risk premium is estimated at $4\mathrm{.}45\%.$ The value of the

company at the end of the fifth year is expected to be $15$ times earnings. Your task is to help Julio de

la Renta estimate Yokohama$$s current value per share