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Please show work and answer both parts a. and b. Thank you! You need to estimate the value of Laputa Aviation. You have the following
Please show work and answer both parts a. and b.
Thank you!
You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of i future investments in new plant and working capital: From year 5 onward, EBITDA, depreciation, and investment are expected to remain unchanged at year-4 levels. Laputa is financed 60% by equity and 40% by debt. Its cost of equity is 18%, its debt yields 9%, and it pays corporate tax at 30%. o. Estimate the company's total value. Note: Do not round Intermedlate celculatlons. Enter your answer In milllons rounded to the nearest whole amount. b. What is the value of Laputa's equity? Note: Do not round Intermedlate calculatlons. Enter your answer In milllons rounded to the nearest whole amountStep by Step Solution
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