Question: QUESTION 1 20 points Save Awwe Crazytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital,

 QUESTION 1 20 points Save Awwe Crazytown Motors is expected to
have an EBIT of $680,000 next year. Depreciation, the increase in net

QUESTION 1 20 points Save Awwe Crazytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $45,000, 59,000, and $40,000, respectively. All cash flow items are expected to grow at 6 percent per year for two years. After Year 3, the CFA is expected to grow at 3 percent indefinitely. The company currently has $3.5 million in debt and 250,000 shares outstanding. The company's WACC is 9.5 percent and the tax rate is 20 percent. What is the present value of terminal value? Show your steps. For the toolbar, press ALT F10 (PC) or ALT+FN+F10 (Mac). S Paragraph Arial 14px v AL T. X ) X X TTT + * 2 A H. EX 2 E V v V V 1 Save AWE QUESTION 2 25 points Crazytown Motors is expected to have an EBIT of $680,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be 545,000, 99,000, and $40,000, respectively. All cash flow items are expected to grow at 6 percent per year for two years. After Year 3, the CFA is expected to grow at 3 percent indefinitely. The company currently has 53.5 million in debt and 250,000 shares outstanding. The company's WACC is 9.5 percent and the tax rate is 20 percent. What is the price per share of the company's stock? Show your steps. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). 5 Paragraph Arial 14px A 2 I X Q5 EX X, & TTT + 0 1 0) Anchor V > !!! - s 9

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!