Icarus Airlines is proposing to go public, and you have been given the task of estimating the value of its equity. Management plans to maintain debt at $37\%$ of the company$$s present value, and you believe that at this capital structure the company$$s debtholders will demand a return of $7\%$ and stockholders will require $14\%.$ The company is forecasting that next year$$s operating cash flow $($depreciation plus profit after tax at $21\%)$ will be $$75$ million and that investment in plant and net working capital will be $$37$ million. Thereafter, operating cash flows and investment expenditures are forecast to grow in perpetuity by $4\%$ a year.

What is the total value of Icarus?

What is the value of the company$$s equity?

Note: For all the requirements, do not round intermediate calculations. Enter your answers in dollars rounded to $2$ decimal places.

Icarus Airlines is proposing to go public, and you have been given the task of estimating

the value of its equity. Management plans to maintain debt at $37\%$ of the company's

present value, and you believe that at this capital structure the company's debtholders will

demand a return of $7\%$ and stockholders will require $14\%.$ The company is forecasting that

next year's operating cash flow $($depreciation plus profit after tax at $21\%)$ will be $$75$ million

and that investment in plant and net working capital will be $$37$ million. Thereafter,

operating cash flows and investment expenditures are forecast to grow in perpetuity by

$4\%$ a year.

a$.$ What is the total value of Icarus?

b$.$ What is the value of the company's equity?

Note: For all the requirements, do not round intermediate calculations. Enter your

answers in dollars rounded to $2$ decimal places.

a$.$ Total value

b$.$ Company's equity