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ABC Inc. has a debt-equity ratio of 0.94 , an equity cost of capital of 18%, and a debt cost of capital of 10%. ABC's
ABC Inc. has a debt-equity ratio of 0.94 , an equity cost of capital of 18%, and a debt cost of capital of 10%. ABC's corporate tax rate is 21%, and its market capitalization is $257 million. a. If ABC s free cash flow is expected to be $7 million one year from now and will grow at a constant rate, what expected future growth rate is consistent with ABC 's current market value? b. Estimate the value of ABC s interest tax shield
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