Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

what is the formula for: and is there a short way to do this: Adjusted Cash Flow from Assets [LO3] Ward Corp. is expected to

what is the formula for: and is there a short way to do this: Adjusted Cash Flow from Assets [LO3] Ward Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase in net working capital, and cap- ital spending are expected to be $165,000, $85,000, and $115,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13 million in debt and 800,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3 percent indefinitely. The companys WACC is 8.5 percent and the tax rate is 35 percent. What is the price per share of the companys stock?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Finance and Investments

Authors: William Brueggeman, Jeffrey Fisher

14th edition

73377333, 73377339, 978-0073377339

More Books

Students also viewed these Finance questions