Fezziwig International (FI) has been in the haberdashery business since 1869. It is an all-equity firm. At the end of the current year, Mr. Fezziwig expects EBIT to be $1M and the same earnings are expected annually in perpetuity. The company is not growing so CAPEX and investments in net working capital are zero. Fezziwigs shareholders require a return of 10%. What is the market value of FI assuming the corporate tax rate is 35%?

$8.0M

$6.5M

$7.5M

$7.0M