A company had $20 of sales per share for the year that just ended. You expect the company to grow their sales at 6.5 percent for the next five years. After that, you expect the company to grow 3.5 percent in perpetuity. The company has a 13 percent ROE and you expect that to continue forever. The company's net margins are percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent.

A company had $20 of sales per share for the year that just ended. You expect the company to grow their sales at 6.5 percent for the next five years. After that, you expect the company to grow 3.5 percent in perpetuity. The company has a 13 percent ROE and you expect that to continue forever. The company's net margins are percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent.

Name: Problem 8-08A company had $20 of sales per share for the year that ju
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Description: Problem 8-08A company had $20 of sales per share for the year that just ended. You expect the company to grow their sales at 6.5 percent for the next five years. After that, you expect the company to grow 3.5 percent inperpetuity. The company has a

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter7: Corporate Valuation And Stock Valuation

Section: Chapter Questions

Problem 11P: Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors...

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