Pearl Corp. is expected to have an EBIT of $3,700,000 next year.Depreciation, the increase in net working capital, and capitalspending are expected to be $160,000, $170,000, and $210,000,respectively. All are expected to grow at 18 percent per year forfour years. The company currently has $19,000,000 in debt and1,150,000 shares outstanding. At Year 5, you believe that thecompany's sales will be $29,410,000 and the appropriate price-salesratio is 2.9. The company’s WACC is 9.4 percent and the tax rate is24 percent. |
