Problem

$8$

$-$

$10$

You are building a free cash flow to the firm model. You expect sales to grow from $

$1\mathrm{.}8$

$$billion for the year that just ended to $

$2\mathrm{.}34$

$$billion five years from now. Assume that the company will not become any more or less efficient in the future. Assume that the company will grow at a constant rate for

$5$

$$years$,$ and then at a constant rate of

$4\mathrm{.}887395$

$\%$

$$for year

$6$

$$and onward after that. Use the following information to calculate the value of the equity on a per

$-$

share basis.

Assume that the company currently has $

$648$

$$million of net PP&E

$.$

The company currently has $

$216$

$$million of net working capital.

The company has operating margins of

$11$

$$percent and has an effective tax rate of

$29$

$$percent$.$

The company has a weighted average cost of capital of

$10$

$$percent$.$ This is based on a capital structure of two

$-$

thirds equity and one

$-$

third debt.

The firm has

$3$

$$million shares outstanding.

Do not round intermediate calculations. Round your answer to the nearest cent.