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You are building a free cash flow to the firm model. You expect sales to grow from $1.2 billion for the year that just
You are building a free cash flow to the firm model. You expect sales to grow from $1.2 billion for the year that just ended to $1.38 billion five years from now. Assume that the company will not become any more or less efficient in the future. Assume that the company will grow at a constant rate for 5 years, and then at a constant rate of 2.334672% for year 6 and onward after that. Use the following information to calculate the value of the equity on a per-share basis. a. Assume that the company currently has $324 million of net PP&E. b. The company currently has $108 million of net working capital. c. The company has operating margins of 12 percent and has an effective tax rate of 31 percent. d. The company has a weighted average cost of capital of 11 percent. This is based on a capital structure of two-thirds equity and one-third debt. e. The firm has 1 million shares outstanding. Do not round intermediate calculations. Round your answer to the nearest cent. S $
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