Analysts expect the Rumpel Felt Company to generate EBIT of $25 million annually in perpetuity (starting in one year). Rumpel is all equity financed and its stockholders require a return of 10%. If Rumple borrows $110 million (interest-only in perpetuity) with a cost of debt of 2%, what will the equity be worth? Assume Rumpel operates in Utopia where corporate taxes are zero.

*It shows 2.5 million is wrong which I got from 25 million divided by 10%

$____ million