The following table presents a four-year forecast for Kenmore Air, Inc.:

-Estimate the fair market value of Kenmore Air at the end of 2012.Assume that after 2016,earnings before interest and tax will remain constant at $200 million,depreciation will equal capital expenditures in each year,and working capital will not change.Kenmore Air's weighted-average cost of capital is 11 percent and its tax rate is 40 percent.

Question

The following table presents a four-year forecast for Kenmore Air, Inc.:
 
-Estimate the fair market value of Kenmore Air at the end of 2012.Assume that after 2016,earnings before interest and tax will remain constant at $200 million,depreciation will equal capital expenditures in each year,and working capital will not change.Kenmore Air's weighted-average cost of capital is 11 percent and its tax rate is 40 percent.

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The Answer of The following table presents a four-year forecast for Kenmore Air, Inc.:
 
-Estimate the fair market value of Kenmore Air at the end of 2012.Assume that after 2016,earnings before interest and tax will remain constant at $200 million,depreciation will equal capital expenditures in each year,and working capital will not change.Kenmore Air's weighted-average cost of capital is 11 percent and its tax rate is 40 percent.

The Following Table Presents a Four-Year Forecast for Kenmore Air