Question: Please show your work. You are going to value Lauryn's Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has
Please show your work.
You are going to value Lauryn's Doll Co. using the FCF model. After consulting various sources, you find that Lauryn has a reported equity beta of 1.7, a debt-to-equity ratio of 5, and a tax rate of 40 percent. Assume a risk-free rate of 6 percent and a market risk premium of 12 percent. Lauryn's Doll Co. had EBIT last year of $57 million, which is net of a depreciation expense of $5.7 million. In addition, Lauryn made $4.3 million in capital expenditures and increased net working capital by $2.6 million. Assume her FCF is expected to grow at a rate of 2 percent into perpetuity. What is the value of the firm? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. Omit the "$" sign in your response.) Firm value $ million
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