Question
It is 2019. You are investigating the possibility of making an equity investment in Walkerville Woodworking Inc., a firm that specializes in producing antique-style furniture
It is 2019. You are investigating the possibility of making an equity investment in Walkerville Woodworking Inc., a firm that specializes in producing antique-style furniture with a modern twist. Your research has revealed the following information: Walkerville has $8 million in excess cash and $1.5 million in debt. The company is expected to have free cash flow of $26 million in 2020 and $30 million in 2021. Beyond 2021, free cash flow is expected to grow at a constant rate of 2% per year forever. Walkervilles weighted average cost of capital (WACC) is 11% and it has 8 million shares outstanding. (5 points) What is the current enterprise value of Walkerville Woodworking given the above assumptions? Please enter your answer in "millions of dollars" with no extra symbols such as "$". Round your answer to 2 decimal places. For example, an enterprise value of $150,367,210.21 would be entered as 150.37 and NOT as 150367210.21.
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