What is the value of flying vikings equity

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You need to estimate the value of Flying Vikings Aviation. You have the following forecasts (in millions of dollars) of it profits, and of its future investments in new plant and working capital. Y1 Y2 Y3 Y4 EDITDA $80 $100 $115 $120 Depreciation $20 $30 $35 $40 Pretax Profit $60 $70 $80 $80 Tax (@40%) $24 $28 $32 $32 Investment $12 $15 $18 $20 From year 5 onward, EBITDA, depreciation, and investment are expected to remain the unchanged at year 4 levels. Flying Vikings in financed 50% by equity and 50% by debt. Its cost of equity is 15% and its debt has a yield to maturity rate of 7% and it pays corporate taxes at 40%. 1. Estimate the company's total value. 2. What is the value of Flying Vikings equity?

Reference no: EM131303711

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