LKO is a somewhat mature company but is seeking growth capital. Right now LKO Co. has EBIT of 10, CAPEX requirements of 5, Depreciation of 3 and negligible changes in working capital year-to-fear. Its beta is 1.5, the risk free rate is 5%, and the market risk premium is 5%. LKO has been growing at 10% but expects to grow at 3% from the coming year and into the future. LKO's D/E ratio is 50% and is likely to remain as such in the future. Lenders currently require a return of 7% on ABC's debt. The tax rate is 30%. 1. Estimate the value of LKO.