1.Standard, Inc. reported EBIT of $35 million for last year. Depreciation expense totaled $20 million and capital expenditures came to $7 million. Free cash flow is expected to grow at a rate of 6 percent for the foreseeable future. Stuart faces a 21 percent tax rate and has a .40 debt to equity ratio with $120 million (market value) in debt outstanding. Standard's equity beta is 1.25, the risk-free rate is currently 5 percent and the market risk premium is estimated to be 7.5 percent. What is the current value (in millions) of Standard's equity?

$237.34

$352.42

$427.42

$583.62

$710.85 Incorrect