Grimer Ltd., a major FMCG company intends to enter the entertainment industry and is targeting to acquire Televista Corporation. Televista is a market leader in the reality tv genre and would serve as the perfect point of entry. Televista has consistently been growing at a growth rate of 25% year on year and is expected to continue the same level of growth for the next four years. After which the company may saturate the market and the growth rate is expected to be 8 % p.a. thereafter. 

The following information has been compiled about Televista Corp. Base year Information $ (mn) Revenues 4500 EBIT 750 Cap Exp 400 Depreciation 300 NWC as a percentage of revenue 20% Corporate tax rate 30% Paid-up capital (10 par) 400 market value of debt 1200 Inputs for high growth phase Length of the high growth phase 4 years Growth rate in revenue, depreciation 25% NWC as percentage of revenue 20% Cost of debt (pre-tax) 10% debt-equity ratio 01:01 Risk-free rate 7% market risk premium 11% equity beta 1.350 Inputs for stable growth phase Expected growth in revenues and EBIT 8% capital expenditure is offset by depreciation NWC as percentage of revenue 20% Cost of debt (pre-tax) 10% debt-equity ratio 02:03 Risk-free rate 7% market risk premium 8% equity beta 1.15.

Required

Compute the Fair value of Televista Corporation.