Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net working capital, and cap spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expected to grow at 15 percent per year fo years. The company currently has $19,500,000 in debt and 860,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.4 percent, indefinitely. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Share price

Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net working capital, and cap spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expected to grow at 15 percent per year fo years. The company currently has $19,500,000 in debt and 860,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.4 percent, indefinitely. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is price per share of the company's stock? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Share price

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 20P

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