A group of investors is intent on purchasing a publicly traded company and wants to estimate the highest price they can reasonably justify paying. The target company's equity beta is $1\mathrm{.}20$ and its debt$-$to$-$firm value ratio, measured using market values, is $60$ percent. The investors plan to improve the target's cash flows and sell it for $12$ times free cash flow in year five. Projected free cash flows and selling price are as follows.

$\backslash$table$[[,($$ millions$)],[$Year cash flows,$1,2,3,4,5],[$Free ching price,$$42,$$$57,$$$62,$$$67,$$$67$