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Assume that the capital expenditures are equal to depreciation. Assume that the treasury rate is 7% and the market risk premium is 6 %. Assume

Assume that the capital expenditures are equal to depreciation. Assume that the treasury rate is 7% and the market risk premium is 6 %. Assume that the unlevered beta is 1.0 and the tax rate is 40%. Cash flows are expected to grow at 3% per year in perpetuity following year 3. The company has a NOL of $550 million and has no debt. You can assume that the discount rate for NOL tax shields to be 7%. What is the estimated value of the firm today?

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