Beach & Company reported net income of $40 million for last year. Depreciation expense totaled $18 million and capital e

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Beach & Company reported net income of $40 million for last
year. Depreciation expense totaled $18 million and capital
expenditures came to $8 million. Free cash flow is expected to grow
at a rate of 5% for the foreseeable future.
Beach faces a 40% tax rate and has a 0.50 debt to equity ratio.
Beach’s asset and equity beta is 0.96 and 1.25 respectively. The
risk-free rate is currently 4.5% and the market risk premium is
estimated to be 8%. Determine the current value of Beach &
Company (in millions) with justification.