What is the price per share of the company stock

Assignment Help Financial Management
Reference no: EM131595112

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. At Year 5, you believe that the company's sales will be $16,800,000 and the appropriate price–sales ratio is 2.9. The company’s WACC is 8.9 percent and the tax rate is 35 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.)

Share price $_____

Reference no: EM131595112

Questions Cloud

Use for debt when calculating the cost of capital : what weight should it use for debt when calculating the cost of capital?
What controls exist for a company social media strategy : Should controls extend to social media? What controls exist for a company's social media strategy?
Sales are on credit-what will be the firm cash cycle : Assuming that all of Ken-Z’s sales are on credit, what will be the firm’s cash cycle?
Value of the premium over and above the exercise value : Calculate the value of the premium over and above the exercise value? Why would an investor pay more than the exercise value for the option.
What is the price per share of the company stock : Ward Corp. is expected to have an EBIT of $2,350,000 next year. What is the price per share of the company's stock?
Expansion project-requires initial fixed asset investment : Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million.
Which company is more at risk of becoming insolvent : How about Company B? Only taking this analysis into account, which company is more at risk of becoming insolvent?
Owner you must serve as compensating control : She recommends you improve controls and says that as owner you must serve as a compensating control.
How much does each car need to sell for to break even : Apple wants to create the new iCar, a driverless car, by 2020. how much does each car need to sell for to break even?

Reviews

Write a Review

Financial Management Questions & Answers

  Pro forma calculations of revenue and expenses

You are asked to do a pro forma analysis of a decision to build a new clinic. Your existing clinic is booked at 100% capacity, it is generating 800 visits per year. There is currently a two month wait for new appointment. How many visits would you as..

  Determine the effect of its inventory turnover ratio

Winston Inc. is trying to determine the effect of its inventory turnover ratio and days sales outstanding on its cash conversion cycle. Winston's 2013 sales (all on credit) were $152,000 and its cost of goods sold was 75% of sales. It turned over its..

  Assets-sales and the debt ratio would not be affected

Assets, sales, and the debt ratio would not be affected. By how much would the cost reduction improve the ROE?

  Calculating returns and standard deviations

Calculating returns and standard deviations: Based on the following information, calculate the expected return and standard deviation for the two stocks.

  What is unidas after-tax debt cost of capital

What is Unidas after-tax debt cost of capital? What is Unida's weighted average cost of capital?

  What is average annual rate of return earned on investment

Fifteen years ago, you put away $5,000. Today, that investment is now worth $16,535. What is the average annual rate of return you earned on your investment?

  What is net present value of new purification system project

Oxygen Optimization is considering buying a new, high efficiency purification system. what is the net present value of the new purification system project?

  Sensitivity of your base-case npv to changes in fixed costs

You are considering a new product launch. The project will cost $1,232,500, have a five-year life, and have no salvage value; depreciation is straight-line to zero. Sales are projected at 310 units per year; price per unit will be $19,300, variable c..

  What is the appropriate cost of capital to evaluate business

What is the appropriate cost of capital to evaluate the business? Compute the weighted average cost of capital.

  Explain the bond its yield-to-maturity has decreased

A bond with annual coupon rate of 5.10% and price of $1,090 just yesterday paid a coupon. A total of 23 coupons remain to be paid. Suppose you buy the bond at today's price, hold it and receive 8 coupons

  Interest rate parity

Six-month T-bills have a nominal rate of 6%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 3%. In the spot exchange market, 1 yen equals $0.008. If interest rate parity holds, what is the 6-month forward exchange ra..

  Risk and return and coefficient of variation based

Risk and Return, Coefficient of Variation Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship. Std Dev. Exp. Return Company A 7.4 13.2 Company B 11.6 18.9

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd