Use the adjusted present value (APV) to find the per share value of Skyline to your firm.Use the WACC to get the horizon value (HV).Use M&M no tax relationship to get the unlevered cost of capital.

Income Statement (in millions):

Y1:Y2:Y3:

EBIT: 202528

Interest Expense 333

EBT 172225

Taxes 5.1 6.6 7.5

Net Income 11.9 15.4 17.5

Net Investment In Operating Capital 2 2.2 2.5

Additional Information: Sales are $35 million for the most recent year. Cost of goods sold are $10 million. Inventory is $ 4 million Gross margin is 15%. EBIT is 2 million. Tax Rate is 35%. Total Assets are $25 million. Retained Earnings are $6 million. Total Liabilities are $15 million.

Additional possibly helpful info: Debt yield: 5% Beta- .8, Market Cap- 25 million, Stock Price - $23, T-bond (riskfree rate) - 1.50%.

Please indicate any assumptions if any additional assumptions were made