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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


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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 f investments in new plant and working capital: Year 1 2 3 4 Earnings before interest, taxes, depreciation, and amortization (EBITDA) Depreciation $ 90 $ 110 $ 125 $ 130 10 20 25 30 Pretax profit 80 90 100 100 Tax at 30% 24 27 30 30 Investment 19 22 25 27 From year 5 onward, EBITDA, depreciation, and investment are expected to remain unchanged at year-4 levels. Laputa is finance 40% by equity and 60% by debt. Its cost of equity is 12%, its debt yields 7%, and it pays corporate tax at 30%. a. Estimate the company's total value. Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount. b. What is the value of Laputa's equity? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount. a. Total value b. Laputa's equity

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