Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help please, ive gotten 554 and 600 for total value (incorrect) and ive gotten 332 and 360 for laputas equity (incorrect) You need to estimate

help please, ive gotten 554 and 600 for total value (incorrect) and ive gotten 332 and 360 for laputas equity (incorrect)
image text in transcribed
You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of its future investments in new plant and working capital: From year 5 onward, EBITDA, depreciation, and investment are expected to remain unchanged at year-4 levels. Laputa is financed 60% by equity and 40% by debt. Its cost of equity is 17%, its debt yields 8%, and it pays corporate tax at 30%. a. Estimate the company's total value. Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount. b. What is the value of Laputa's equity? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions

Question

describe the key elements of work;

Answered: 1 week ago