Your rm would like to evaluate a proposed new operating division. You have forecasted cash ows for this division for the next ve years, and have estimated that the cost of capital is 10%. You would like to estimate a continuation value. You have made the following forecasts for the last year of your ve-year forecasting horizon (in millions of dollars): Year 5 Revenues $191.9 Operating income 79.7 Net income 51.8 Free cash ows 119.7 Book value of equity 419.4 a. You forecast that future free cash ows after year 5 will grow at 3% per year, forever. Estimate the continuation value in year 5, using the perpetuity with growth formula. a. You forecast that future free cash ows after year 5 will grow at 3% per year, forever. Estimate the continuation value in year 5, using the perpetuity with growth formula. The continuation value in year 5 is $ million. (Round to one decimal place.) b. You have identied several rms in the same industry as your operating division. The average PIE ratio for these rms is 29. Estimate the continuation value assuming the PIE ratio for your division in year 5 will be the same as the average P/E ratio for the comparable rms today. The continuation value in year 5 is $ million. (Round to one decimal place.) c. The average market/book ratio for the comparable rms is 2.7. Estimate the continuation value using the market/book ratio. The continuation value in year 5 is $ million. (Round to one decimal place.)