
a
Adequate information:
Market value of debt
Cost of debt
Market value of equity
Debt value
Projected EBIT in one year
EBIT growth rate for first 5 years
EBIT perpetuity growth rate
Net working capital percentage for EBIT
Capital spending percentage for EBIT
Depreciation for EBIT
Shares outstanding
Tax rate
To compute: Stock price for the company J.
Introduction: The term Share price refers to the valuation of the stock based on factor considerations such as total debt, enterprise value, shares outstanding, etc.
b
Adequate information:
Market value of debt
Cost of debt
Market value of equity
Cost of equity
Debt value
Projected EBIT in one year
EBIT growth rate for first 5 years
EBIT perpetuity growth rate
Net working capital percentage for EBIT
Capital spending percentage for EBIT
Depreciation for EBIT
Shares outstanding
Tax rate
EV/EBITDA = 9
To compute: Stock price
Introduction: The term Share price refers to the valuation of the stock based on factor considerations such as total debt, enterprise value, shares outstanding, etc.

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Chapter 13 Solutions
Corporate Finance
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