Assume GAAP (not IFRS). Please estimate the value of ABM Corp. following the sum of parts approach.

ABM Corp. itself (consolidated financial statement):

EBIT = $500M

Capital Invested = $2,000M

Total debt outstanding = $500M

Cash holdings of $300M

Cash adjusted cost of capital = 10%

In stable growth stage with 5% growth rate in EBIT

Tax rate = 40%

Subsidiaries information:

• 70% holdings of PLC
  • $100M EBIT, $500M Capital Invested, $200M debt, and $100M cash
  • A public firm with MV of equity $1 Billion
• 30% holdings of BBC
  • $100M debt and $50M cash
  • A private firm with estimated MV of equity $500M
• 20% hondings of STR.
  • $200M debt and 100M cash
  • A public firm with MV of equity $700 Million

Use cash-adjusted ROC and apply 20% discount on minority holdings value. You can use no discount and no premium for cash value.