Assume you are conducting a discounted cash flow valuation of Family Health Associates. You have assembled the following financial information (all numbers are in millions). The after tax-cost of debt is 7 percent, the cost of equity is 19 percent, and the weighted average cost of capital is 14.2 percent.
Year 1 Year 2 Year 3 Year 4
Net profit $3.0 $3.2 $4.0 $5.2
Depreciation 6.0 6.0 7.0 7.0
Equity retentions 3.0 4.0 5.0 6.0
Terminal value 60.0
What is the estimated value of Family Health Associates?
$45.3 million
$65.6 million
$52.2 million
$67.9 million
$77.4 million