Eberhart Manufacturing has projected sales of $145.6 million next year. Costs are expected to be $81.3 million and net investment is expected to be $15.3 million. Each of these values is expected to grow at 16 percent the following year, with the growth rate declining by 2 percent per year until the growth rate reaches 8 percent, where it is expected to remain indefinitely. There are 5.8 million shares of stock outstanding and investors require a return of 15 percent return on the company’s stock. The corporate tax rate is 35 percent. (Do not round intermediate calculations and round your answer to 2 decimal places. (e.g., 32.16))

a. What is your estimate of the current stock price ?

b. Suppose instead that you estimate the terminal value of the company using a PE multiple. The industry PE multiple is 13. What is your new estimate of the company’s stock price ?