Problem:
Tiptop Corp. has debt of $150 million and generated a net income of $88 million in the last fiscal year. In attempting to determine the total value of the firm, an investor identified a similar firm in Mammoth, Inc., an all-equity firm. This firm had 100 million shares outstanding, a share price of $17.50, and net income of $225 million.
Required:
Question: What is the total value of Tiptop Corp?
Note: Please provide reasons to support your answer.