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 25% of the companys present value, and you believe that at this capital structure the companys debt holders will demand a return of 8% and stockholders will require 14%. The company is forecasting that next years operating cash flow (depreciation plus profit after tax at 40%) will be $80 million and that investment expenditures will be $23 million. Thereafter, operating cash flows and investment expenditures are forecast to grow by 6% a year.

a.	What is the total value of Icarus? (Do not round your intermediate calculations. Enter your answer in millions rounded to the nearest whole number.)

Total value

$ millions

b.	What is the value of the companys equity? (Do not round your intermediate calculations. Enter your answer in millions rounded to the nearest whole number.)

Companys equity

$ millions