Question
Lansing Corporation reported EBIT of $65 million for last year. Depreciation expense totaled $15 million and capital expenditures came to $6 million. Free cash flow
Lansing Corporation reported EBIT of $65 million for last year. Depreciation expense totaled $15 million and capital expenditures came to $6 million. Free cash flow is expected to grow at a rate of 4.5 percent for the foreseeable future. Lansing faces a 21 percent tax rate and has a .35 debt to equity ratio with $260 million (market value) in debt outstanding. Lansing's equity beta is 1.35, the risk-free rate is currently 5 percent, and the market risk premium is estimated to be 6.5 percent. What is the current total value of Lansing's equity (in millions)?
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