You are an analyst for ABC Corp that made last year $2,000,000 in net income last year and has 1,000,000 shares outstanding. Management has given you guidance that they expect net income to increase 5% for the next 5 years and then 3% thereafter and further that they expect shares outstanding to remain the same. You agree with management's expectations and have calculated their WACC to be 12%. The stock is currently trading at $20 per share. Do you agree with the valuation and what then is your buy/sell/hold recommendation? What is your calculated P/E ratio? If the company has $20,000,000 in debt and using your stock valuation, what would the company's enterprise value be? Homework Read Appendix A in Chapter 11 (426-430 2e, 433-438 3e) Draw an option payoff map assuming you buy a cracker barrel call option with a strike price of $140.00 per share and also buy a put option on BBT at $55.00