Problem
Omni Travel has $50 million in excess cash and no debt. The firm expects to generate additional free cash flows of $40 million per year in subsequent years and will pay out these future free cash flows as regular dividends. Omni's unlevered cost of capital is 10% and there are 10 million shares outstanding. Omni's board is meeting to decide whether to pay out its $50 million in excess cash as a special dividend or to use it to repurchase shares of the firm's stock. What is Omni's enterprise value?