Question 6 (3 points) Hammersmith is a highly leveraged cellular phone company. Set out below is its income statement in Year 0: $millions Revenue 12,500 Operating Expenses 11,200 - Depreciation 1,800 EBITO |-500 Interest Expenses 800 Income Before Tax |-1,300 |- Taxes 0 Net Income -1,300 At the end of Year 0, Hammersmith had a negative book value of equity, and a cash balance of $25 million. The firm had only one debt throughout Year 0: a fixed rate bond with a coupon of 8% and a remaining life of 5 years at the end of Year 0. These bonds are trading at a 20% discount to face value. The average EV/EBITDAO multiple for other cellular firms is 9 times. Estimate the equity value of the firm based upon the valuation of comparable firms. (3 points)