Your analysis of Telmet Corp. suggests that the company will achieve sales of approximately $1,780 million for the year 2017, and that sales will grow at a rate of 9% for five more years after that (so, through the end of 2022). The company’s operating costs (including depreciation) are expected to stay at 65% of sales. The firm faces a tax rate of 40%. CAPEX is expected to remain at 6% of sales. Depreciation is expected to stay at 4.5% of sales, and investment in net working capital is projected to be steady at 2.5% of sales. Telmet is an all-equity firm, and has 36.5 million shares outstanding.

Free cash flow (FCF) for Telmet is projected to grow at a constant rate of 3.5% past 2022. There is insufficient returns data to estimate Telmet’s beta using a regression of firm stock returns on market returns. You estimate that the average beta for the other firms in the industry is 1.42, and that these firms are financed with close to 25% debt and 75% equity. They too face a marginal tax rate of 40%. The risk free rate of return is 2.75% and the estimated market risk premium is 6.50%. Estimate the per-share value of Telmet Corp common stock.