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You are tasked with estimating the value of a stock. Specifically, estimate the common stock's per - share value using a free cash flow model.

You are tasked with estimating the value of a stock. Specifically, estimate the common stock's per-share value using a free cash flow model. Use the following information to perform your computation:
Going forward, you expect free cash flows to grow at a constant rate of 4.5% indefinitely (there is no non-constant growth in the beginning), which means that you can use the constant growth model to value the firm.
Current year EBIT is $2,500,000.
Current year depreciation expense is $800,000. Their tax rate is 25%.
Current year capital expenditures are $300,000.
They currently have $200,000 in net debt (debt minus cash).
The change in net working capital is $250,000.
You calculate the discount rate to be 10%.
The company has 1,000,000 common shares outstanding.
If this stock is currently trading at $30 per share, would you recommend buying it based on the model? Provide a brief explanation for your recommendation.

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