Acme is expected to sell 500,000 units of its product in year 1. From year 2 to

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Acme is expected to sell 500,000 units of its product in year 1. From year 2 to year 5, Acme’s sales volume (in units) is expected to increase by 10% each year. After year 5, Acme’s sales volume is expected to increase by 1% in perpetuity. The selling price per unit is expected to be $10 in year 1 and Acme is expected to increase the selling price by 1% each year thereafter. Acme’s EBIT margin is expected to be 40% of (dollar) sales for the next 4 years and 30% thereafter. Acme’s depreciation expense is expected to be 20% of sales for the next two years and 10% thereafter. Acme’s capital expenditures are expected to be 25% sales for the next three years and 10% thereafter. Acme’s net working capital is $450,000 today and is always expected to be 10% of sales in future years. (Note that this is the net working capital, not the change in net working capital.) Acme’s shares are trading at $10 per share and Acme has 2,000,000 shares outstanding. The discount rate for Acme is 14.992%. The corporate tax rate is 35%. Assume all cash flows occur at the end of the year.

Based on the DCF, what is the fair value for Acme shares?