Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have looked at the current financial statements for Reigle Homes, Co. The company has an EBIT of $4,150,000 this year. Depreciation, the increase in

You have looked at the current financial statements for Reigle Homes, Co. The company has an EBIT of $4,150,000 this year. Depreciation, the increase in net working capital, and capital spending were $290,000, $142,000, and $540,000, respectively. You expect that over the next five years, EBIT will grow at 20 percent per year, depreciation and capital spending will grow at 10 per year, and NWC will grow at 15 per year. The company has $24,000,000 in debt and 445,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.45 percent indefinitely. The companys WACC is 9.5 percent and the tax rate is 24 percent. What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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

Step: 3

blur-text-image

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

The Idea On Cryptocurrencies

Authors: Lida Navejar

1st Edition

979-8353788157

More Books

Students also viewed these Finance questions

Question

Apply PESO model to better understand the complexity of media.

Answered: 1 week ago