Lemmon has EAT, depreciation expense, capital expenses and debt principal payments of $4m, $.2m, $.3m,...
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Lemmon has EAT, depreciation expense, capital expenses and debt principal payments of $4m, $.2m, $.3m, and $.5m respectively. Its roe in the market has been 12 %, and the risk free rate is .02. Between the first and the second years, it has current assets of $11m and $11.4m and current debts of $5m and $5.1m respectively. Its unlevered beta, D/E and t are 2, 60/40 and .25 respectively. Lemmons ROE is 20%, and it plows about 30% of its profits back into its business.
Derive the value of Lemmon.
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