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Simple RI In 2 0 1 4 , American Faucet Corporation ( AFC ) had earnings before interest and taxes of $ 2 5 0

Simple RI
In 2014, American Faucet Corporation (AFC) had earnings before interest and taxes of $250 million. AFC is subject to
a tax rate of 37 percent. The book value and market value of AFC's common equity at the beginning of 2014 was
$500 million and $350 million, respectively. AFC's debt had a book value of $250 million at the beginning and end of
2014 and the company pays 9 percent interest on its debt. The company's cost of equity capital is estimated to be
11.5 percent. Based on this information, AFC's residual income will be closest to:
$
million
Round your answer to two decimals
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