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Consider the financial statements below for Media Motors. The firm's cost of capital is 10%. The firm is stable, and the long-term growth rate for all items is expected to be 4%. Their CEO's name is Ray Charles. Use the information below to estimate the fair market value of MM's equity as of year-end 2013.
2013 Income Statement
Sales
500
Cost of goods sold
250
SG&A expense
50
EBIT
200
Interest expense
40
Taxable income
160
Taxes
64
Net Income
96
2012 Balance Sheet
Cash
Accounts payable
70
Accounts receivable
100
Total current liab.
Inventory
Total current assets
350
Long-term debt
400
Gross fixed assets
1,000
Common stock
Accumulated depreciation
Retained earnings
480
Net fixed assets
800
Total equity
680
Total
1,150
2013 Balance Sheet
130
220
420
450
1,120
270
470
850
720
1,270
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