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Help would be greatly appreciated, thank you. You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars)
Help would be greatly appreciated, thank you.
You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of its futu 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 40% by equity and 60% by debt. Its cost of equity is 12%, 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 amountStep by Step Solution
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