Question: Please solve by hand not excel. 0) Olin Industries expect sales to grow at a rapid rate over the next three years, but settle to

 Please solve by hand not excel. 0) Olin Industries expect sales Please solve by hand not excel.

0) Olin Industries expect sales to grow at a rapid rate over the next three years, but settle to an industry growth rate of 3% in year 3 . Suppose Olin has a weighted average cost of capital of 10%, $20 million in cash, \$10 million in debt, and 20 million shares outstanding. Assume that Olin's Sales in Years 0 to 3 is 250,300,350,400 million; EBIT is 10% of sales, the corporate tax rate is 37%, the depreciation rate equals new capital expenditures, and the increase net working capital is estimated at 12% of sales. If it is announced that the corporate tax rate will be reduced to 20% starting t=1, what will be the percent change in Olin's stock price at t=0 ? (Note: You may ignore the effect of the tax cut on Olin's WACC)

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