Please help! please show the calculation. Thank
you!
Dionex Corporation, a leader in the development and manufacture
of ion chromography systems (used to identify contaminants in
electronic devices), reported earnings per share of $2.02 in 1993,
and paid no dividends. These earnings were expected to grow 14% a
year for five years (1994 to 1998) and 7% a year after that. The
firm reported depreciation of $2 million in 1993 and capital
spending of 54.20 million, and had 7 million shares outstanding.
The working capital was expected to remain at 50% of revenues,
which were $106 million in 1993, and were expected to grow 6% a
year from 1994 to 1998 and 4% a year after that. The firm was
expected to finance 10% of its capital expenditures and working
capital needs with debt. Dionex had a beta of 1.20 in 1993, and
this beta was expected to drop to 1.10 after 1998. (The Treasury
bond rate was 7%, and the market risk premium was 5.5%.)
industry have capital expenditures that are 15% of earning, and
maintain working capital at 25% of revenues.
Please help! please show the calculation. Thank you! Dionex Corporation, a leader in the development and manufacture of
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