Question: How was the Ke column calculated for this problem below? Ernie Manufacturing has projected sales of $ 1 0 0 . 1 million next year.

How was the Ke column calculated for this problem below?
Ernie Manufacturing has projected sales of $100.1 million next year. Costs are expected to be $90 million and net investment is expected to be $5 million. Each of these values is expected to grow at 14 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 6 percent where it will remain. There are 5.5 million shares of stock outstanding. Investors require a return of 13 percent and the corporate tax rate is 40 percent. What is your estimate of the current stock price?
Answer:
C) $3.24
\table[[Years,Growth rate%,FCFF,Ke=13%,\table[[PV of],[FCFF]]],[1,,$1.06,0.8850,$0.94
 How was the Ke column calculated for this problem below? Ernie

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