Bullseye Corp. does not pay dividends. As an analyst for the company, you are trying to assess the stock price and realize you cannot use the dividend discount model because of the lack of dividend payment.

For the coming year, you estimate the following based upon past performance and current conditions:

 

EBIT of $500,000
 Depreciation of $250,000
  Tax rate of 21%
  Change in NWC of $100,000
  Capital Expenditures of $350,000
  Market Value of Debt of $3,000,000
  Excess Cash of $250,000
  100,000 shares outstanding
  W ACC=10.9%
  Expected growth in free cash flows of:
 o Year 2 and Year 3: 10%
 o Year 4 and beyond: 5%

 

What is the your estimate for Bullseye’s stock price?