Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net workingcapital, and capital spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expectedto grow at 15 percent per year for four years. The company currently has $19,500,000 in debt and 860,000 sharesoutstanding. At Year 5, you believe that the company's sales will be $28,700,000 and the appropriate price-salesratio is 3.4. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is the price per share of thecompany's stock?Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.Share price

Name: Derry Corporation is expected to have an EBIT of $3,100,000 next year
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Description: Derry Corporation is expected to have an EBIT of $3,100,000 next year. Depreciation, the increase in net workingcapital, and capital spending are expected to be $245,000, $150,000, and $250,000, respectively. All are expectedto grow at 15 percent pe

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ratio is 3.4. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is the 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

ratio is 3.4. The company's WACC is 9.7 percent and the tax rate is 23 percent. What is the 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

Chapter4: Financial Planning And Forecasting

Section: Chapter Questions

Problem 9P

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