Chapter 08: Assignment-Equity Valuation Back to Assignment 7. Problem 8-10 Average/1 Problem 8-10 You are building a free cash flow to the firm model. You expect sales to grow from $1.4

billion for the year that just ended to $1.68 billion five years from now. Assume that the company will not become any more or less efficient in the future. Assume that the company will grow at a constant rate for 5 years, and then at a constant rate of 3.213729% for year 6 and onward after that. Use the following information to calculate the value of the equity on a per-share basis. a. Assume that the company currently has $420 million of net PPBE b. The company currently has $140 million of net working capital. c. The company has operating margins of 12 percent and has an effective tax rate of 30 percent. d. The company has a weighted average cost of capital of 11 percent. This is based on a capital structure of two-thirds equity and one-third debt. e. The firm has 1 million shares outstanding. Do not round intermediate calculations. Round your answer to the nearest cent. Grade it Now Save & Continue