Cash flow to equity model to value stock

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A company had $16 of sales per share for the year that just ended. You expect the company to grow their sales at 7 percent for the next five years. After that, you expect the company to grow 4.5 percent in perpetuity. The company has a 14 percent ROE and you expect that to continue forever. The company's net margins are 6 percent and the cost of equity is 11 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.

Reference no: EM132412356

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