The following company is expected to grow rapidly for the first four year. The EPS is...

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The following company is expected to grow rapidly for the firstfour year. The EPS is expected to grow at 30, 18, 12, and 9percent, respectively for the first four years. After the fastgrowth for the first four years the growth slows down to 7 percentrate. The company is expected to keep this growth for thelong-term. The company’s initial earnings per share EPS is $2.4.The required net capital expenditure per share for the next fiveyears are $3, $2.5, $2, $1.5, and $1. The required net workingcapital expenditure is the half of fixed capital expenditure foreach year The company will borrow as much as the 30 percent oftotal capital investment required (fixed capital plus workingcapital) for each year The cost of equity is assumed to be flat10.4 percent for the entire period. P/E ratio of similar companiesis 30. Question: Estimate the free cash flow to equity holders(FCFE) for the first five years What is the per-share value of thiscompany? (Use free cash flow valuation).

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The following company is expected to grow rapidly for the firstfour year. The EPS is expected to grow at 30, 18, 12, and 9percent, respectively for the first four years. After the fastgrowth for the first four years the growth slows down to 7 percentrate. The company is expected to keep this growth for thelong-term. The company’s initial earnings per share EPS is $2.4.The required net capital expenditure per share for the next fiveyears are $3, $2.5, $2, $1.5, and $1. The required net workingcapital expenditure is the half of fixed capital expenditure foreach year The company will borrow as much as the 30 percent oftotal capital investment required (fixed capital plus workingcapital) for each year The cost of equity is assumed to be flat10.4 percent for the entire period. P/E ratio of similar companiesis 30. Question: Estimate the free cash flow to equity holders(FCFE) for the first five years What is the per-share value of thiscompany? (Use free cash flow valuation).