What is the enterprise value and the current stock price

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Reference no: EM131968626

KCP had sales of $600 million in 2005. Suppose you expect it sales to grow at a 9% rate in 2006, but this growth rate will slow by 1% per year to a long-run growth rate for the apparel industry of 4% by 2011. Based on KCP's past profitability and investments needs, you expect EBIT to be 9% of sales, increases in net working capital requirements to be 10% of any increase in sales, and net investment (capital expenditures in excess of depreciation) to be 8% of any increases in sales. If KCP has $100 million in cash, $3 million in debt, $21 million shares outstanding, a tax rate of 37%, and a weighted average cost of capital of 12%. What is the enterprise value and the current stock price?

Reference no: EM131968626

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