Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in...

 

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Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $240,000, $145,000, and $245,000, respectively. All are expected to grow at 20 percent per year for four years. The company currently has $19,000,000 in debt and 855,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.3 percent indefinitely. The company's WACC is 9.6 percent and the tax rate is 22 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.) Share price Dewey Corp. is expected to have an EBIT of $3,050,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $240,000, $145,000, and $245,000, respectively. All are expected to grow at 20 percent per year for four years. The company currently has $19,000,000 in debt and 855,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.3 percent indefinitely. The company's WACC is 9.6 percent and the tax rate is 22 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.) Share price

Answer rating: 100% (QA)

To find the price per share of the companys stock we will use the free cash flow to equity FCFE appr... View the full answer