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You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of its future

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You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of its future investments in new plant and working capital Year 1 2 3 4 Earnings before interest, taxes, depreciation, and amortization (EBITDA) S 96 S 121 106 126 26 36 41 46 60 70 80 Depreciation Pretax profit Tax at 40% Investment 24 28 32 32 15 18 21 23 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 17%, its debt yields 8%, and it pays corporate tax at 40%. a. Estimate the company's total value. (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount.) Total value million b. What is the value of Laputa's equity? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal. places.) Laputa's equity million $ $ 80 $ Earnings before interest, taxes, depreciation, and amortization (EBITDA) 86 106 121 126 26 36 41 46 60 70 BO BO Depreciation Pretax profit Tax at 408 Investment 24 28 32 32 15 18 21 23 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 17%, its debt yields 8%, and it pays corporate tax at 40%. a. Estimate the company's total value. (Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount.) Total value million b. What is the value of Laputa's equity? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) million i Laputa's equity Year 0 S S

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