The ebit depreciation and tax rate of a firm are 20 million


The EBIT, Depreciation, and tax rate of a firm are $20 million, $2 million and 35% respectively. Its sales rise $5, and its inventory ratio to sales is 40%, while its accounts receivable to sales is 45%, and its accounts payable to sales is 35%. The company pays interest of $3, principal payments of $1.5 and buys $2.5 million of other assets this year. If we know that the company has a growth rate of cash flow of 100% the first year and 2% growth rate after that perpetually, what is its price? We also know that the beta, default free rate and market rate of return are 1, .04 and .09 respectively.    

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Financial Management: The ebit depreciation and tax rate of a firm are 20 million
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