M&M Inc. has 20 million shares of common stock outstanding and no preferred stock. Its annual earnings are expected to stay at $200 million in perpetuity if the company does not

undertake any new projects. M&M has decided to pay out 40% of its earnings in dividends and reinvest the remainder in new projects each year, starting from next year. The rate of return on its reinvested earnings is forecasted to be 20% per year. The risk-free rate of return is 8% per year, the expected rate of return on the market portfolio is 15%, and the M&M stock has a beta of 1.2. Assume that all cash flows occur at the end of the year and it is now the end of the current year. What is the present value of the growth opportunities (PVGO) resulting from the new projects for M&M Inc.?