5) Northern Lights Incorporated is a Canadian lighting fixtures manufacturer. The Canadian dollar risk free rate is 7 percent. The risk premium in the Canadian stock market is 6 percent. Northern Lights' beta is 1.5 when measured against the Canadian market. Northern Lights' pretax borrowing cost in Toronto on new long-term Canadian dollar denominated debt is 10 percent. The debt-to-equity ratio for Northern Lights is 50 percent. Northern Lights could appeal to international investors by listing on the New York stock exchange. If they chose to do so, Northern Lights could borrow Canadian dollars in the New York market at a pretax cost of 8 percent. International investors are willing to tolerate a 60 percent debt-to-equity mix at this cost of debt. With a 60 percent debt to equity ratio, the beta of Northern Lights is 1.2 against the MSCI World index. The risk premium on the world market portfolio is 5 percent. Interest payments are tax deductible in Canada at the marginal corporate tax rate of 50%. Suppose Northern Lights generated after-tax operating cash flow of 200 million Canadian dollars last year, and that earnings are expected to grow at 4 percent perpetually. Find Northern Lights value assuming they have access to the international capital markets (integrated markets). Show all necessary calculations to support your