Buyer wants to acquire company Co. The following projections in millions are used to value Co:

YEAR 1 2 3 4 5

REV 200 210 220 230 240

Cost 100 105 110 115 120

EBIT 100 105 110 115 120

Change 3 3 4 4 5

in NWC

Also:

Co is financed 80% with equity (E) and 20% with debt (D). The interest rate on the debt is 8%.

The tax rate is 40%

Appropriate beta ofCois assumed to be 0.8

Capital expenditure: 10 million each year from year 1 to year 5

Depreciation: 6 million each year from year 1 to year 5

Treasury yields for 10-year bonds are 7%

The market risk premium is 7.5%

After year 5, EBIT is expected to grow 3% per year in perpetuity

How much Buyer should pay for 100% of the shares of Co?