Jess Co. expects to have sales of 138,477 next year, costs of 92,785, and net investment of
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Jess Co. expects to have sales of 138,477 next year, costs of 92,785, and net investment of 13,565. Each of these values is expected to grow at 15% for the next five years (T1 to T5), and then at 2% forever thereafter (Starting T6). The firm has 7,500 shares outstanding and investors require a 10% rate of return on their investment. Lastly, the firm has a 30% corporate tax rate. The comparable P/E for Jess Co. equals 19.5. Calculate the price per share using the P/E Multiple Approach for the terminal value. (Round to 3 decimals)
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
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