Toy Kingdom has a net income of $8 million, depreciation expense of $1.6 million, and capital expenditures of $2.5 million. Toy Kingdom has an expected constant growth rate in FCF of 1.8%, and an average tax rate of 40%. Assume Toy Kingdom has a debt-to-equity ratio of .3 (with $50 million in debt); the current equity beta is 1.4; the risk-free rate is 2%; and the market risk premium is 6%. What is Toy Kingdom's net equity value? Round calculated answers to two decimal places.

Answer rating: 100% (QA)

We can calculate Toy Kingdoms net equity value using the following steps Free Cash Flow FCF to Equity Net income 8 million Depreciation expense 16 mil... View the full answer