BigCo is a publicly traded firm with a diversified shareholder base. It has an asset beta of 1.3 and an equity beta of 1.7. It is acquiring a company called SmallCo, which operates in a different industry. SmallCo has no debt, an asset beta of 0.8, and constant perpetual after-tax cash flows of $100 per year (with the first cash flow occurring at the end of the current year). Assuming that BigCo has a debt beta of 0.25, the risk-free rate is 4%, and the market risk premium is 5%, what is BigCo's valuation of SmallCo? (3 points)