What is the estimated current value of one share of stock

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Duplan Street Mills is an all-equity firm with 28,000 shares of stock outstanding. The firm expects sales of $600,000 one year from today (next year). Sales are expected to grow by 8 percent per year for the following three years and then level off to a constant 3 percent growth rate per year in perpetuity. Net cash flow varies in direct proportion to sales and is currently equal to 15 percent of sales. The required return for this firm is 14 percent. What is the estimated current value of one share of stock?

Reference no: EM131956434

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