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Ward Corp. is expected to have an EBIT of $1,950,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $166,000, $87,000, and $116,000, respectively. All are expected to grow at 15 percent per year for four years. The company currently has $13,500,000 in debt and 810,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 2.5 percent indefinitely. The company’s WACC is 8.1 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 final answer to 2 decimal places, e.g., 32.16.)
Share price $
Describe the variables and their scale of measurement
Marten Corp has a 14% WACC with a 19% expected return on equity and a 60% debt-to-asset ratio. If Marten pays no income tax, what is the return on debt? If the debt-to-asset ratio increases to 80%, now what is Marten’s WACC?
The following terms relate to independent bond issues:
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