MGI Inc., a private company, reported after-tax operating income of $ 50 million on revenues of $ 1.5 billion in the most recent year. Its book value of capital is $500 million and it expects to maintain a growth rate of 3% a year in perpetuity. The unlevered beta for publicly traded peer firms in the same sector is 1.20; the correlation of MGI Inc. with the market is 60%. The company is all equity funded (no debt). The risk-free rate is 5% and the market risk premium is 4%. What is the value of the company?

Select one:

a. $327.73 million

b. $350 million

c. $468.18 million

d. $360.50 million

e. $515 million