7.16 Ergo Unlimited’s current year’s free cash flow to equity is $10 million. It is projected to grow at 20% per year for the next five year.s. It is expected to grow at a more modest 5% beyond the fifth year. The firm estimates that its cost of equity is 12% during the next five years and will drop to 10% beyond the fifth year as the business matures. Estimate the firm’s current market value.

Answer: $358.3 million