Question

Ward Corp. is expected to have an **EBIT of
$2,100,000** next year. Depreciation, the increase in net
working capital, and capital spending are expected to be
**$169,000, $93,000,** and **$119,000,**
respectively. All are expected to grow at **18
percent** per year for four years. The company currently has
**$15,000,000** in debt and **840,000**
shares outstanding. At Year 5, you believe that the company's sales
will be **$16,300,000** and the appropriate
**price–sales ratio is 2.4**. The company’s
**WACC is 8.4 percent** and the **tax rate is 40
percent.**

What is the price per share of the company's stock? **(Do not
round intermediate calculations and round your answer to 2 decimal
places, e.g., 32.16.)**

**Answer is not 22.72**

Answer #1

Ward Corp. is expected to have an EBIT of $2,350,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $174,000, $103,000, and $124,000,
respectively. All are expected to grow at 17 percent per year for
four years. The company currently has $17,500,000 in debt and
840,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3.5 percent indefinitely. The
company’s WACC is 8.9 percent and the...

Ward Corp. is expected to have an EBIT of $2,200,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $171,000, $97,000, and $121,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $16,000,000 in debt and
810,000 shares outstanding. At Year 5, you believe that the
company's sales will be $16,500,000 and the appropriate price?sales
ratio is 2.6. The company’s WACC is 8.6 percent...

Pearl Corp. is expected to have an EBIT of $3,400,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $160,000, $155,000, and $195,000,
respectively. All are expected to grow at 18 percent per year for
four years. The company currently has $17,500,000 in debt and
1,350,000 shares outstanding. At Year 5, you believe that the
company's sales will be $27,030,000 and the appropriate price-sales
ratio is 2.6. The company’s WACC is 9.1 percent...

Ward Corp. is expected to have an EBIT of $2,200,000 next year.
Depreciation, the increase in net working capital, and capital
spending are expected to be $171,000, $97,000, and $121,000,
respectively. All are expected to grow at 20 percent per year for
four years. The company currently has $16,000,000 in debt and
810,000 shares outstanding. After Year 5, the adjusted cash flow
from assets is expected to grow at 3.5 percent indefinitely. The
company’s WACC is 8.6 percent and the...

URGENT!!! 30 MINUTES LEFT!!! Pearl Corp. is expected to have an
EBIT of $2,400,000 next year. Depreciation, the increase in net
working capital, and capital spending are expected to be $160,000,
$105,000, and $145,000, respectively. All are expected to grow at
20 percent per year for four years. The company currently has
$12,500,000 in debt and 1,050,000 shares outstanding. At Year 5,
you believe that the company's sales will be $20,400,000 and the
appropriate price-sales ratio is 2.6. The company’s...

River Walk Tours is expected to have an EBIT of $184,000 next
year. Depreciation, the increase in net working capital, and
capital spending are expected to be $11,000, $1,500, and $13,000,
respectively. All are expected to grow at 6 percent per year for
three years. After Year 4, the adjusted cash flow from assets is
expected to grow at 2.5 percent indefinitely. The company's WACC is
9.2 percent and the tax rate is 21 percent. What is the terminal
value...

Franktown Motors is expected to have an EBIT of $2,200 next
year. Depreciation, the increase in net working capital, and
capital spending are expected to be $158, $92, and $114,
respectively. This yields a year 1 Free Cash Flow of $1,404. All
items are expected to grow at 15 percent per year until the end of
year 4. The firm currently has $12,098 in debt and 538 shares
outstanding. After year 4, the adjusted cash flow from assets is
expected...

You have looked at the current financial statements for Reigle
Homes, Co. The company has an EBIT of $3,010,000 this year.
Depreciation, the increase in net working capital, and capital
spending were $233,000, $98,000, and $455,000, respectively. You
expect that over the next five years, EBIT will grow at 17 percent
per year, depreciation and capital spending will grow at 22 percent
per year, and NWC will grow at 12 percent per year. The company has
$16,700,000 in debt and...

You have looked at the current financial statements for Reigle
Homes, Co. The company has an EBIT of $3,010,000 this year.
Depreciation, the increase in net working capital, and capital
spending were $233,000, $98,000, and $455,000, respectively. You
expect that over the next five years, EBIT will grow at 17 percent
per year, depreciation and capital spending will grow at 22 percent
per year, and NWC will grow at 12 percent per year. The company has
$16,700,000 in debt and...

You have looked at the current financial statements for Reigle
Homes, Co. The company has an EBIT of $2,910,000 this year.
Depreciation, the increase in net working capital, and capital
spending were $228,000, $93,000, and $430,000, respectively. You
expect that over the next five years, EBIT will grow at 19 percent
per year, depreciation and capital spending will grow at 24 per
year, and NWC will grow at 14 per year. The company currently has
$15,700,000 in debt and 365,000...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 10 minutes ago

asked 22 minutes ago

asked 27 minutes ago

asked 35 minutes ago

asked 35 minutes ago

asked 57 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago