Cumberland Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase in
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Cumberland Corp. is expected to have an EBIT of $1.9 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $165,000, $85,000, and $115,000, respectively. All are expected to grow at 18% 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% indefinitely. The company’s WACC is 8.5% and the tax rate is 35%. What is the price per share of the company’s stock?
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Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781259654756
10th Canadian Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan, Gordon Roberts, J. Ari Pandes, Thomas Holloway
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