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Compressed APV with Nonconstant Growth Sheldon Corporation projects the following free cash flows (FCFS) and interest expenses for the next 3 years, after which FCF
Compressed APV with Nonconstant Growth Sheldon Corporation projects the following free cash flows (FCFS) and interest expenses for the next 3 years, after which FCF and interest expenses are expected to grow at a constant 8% rate. Sheldon's unlevered cost of equity is 11% its tax rate is 25%. Year 1 2 3 Free cash flow ($ millions) $20.0 $30.0 $40.0 Interest expense ($ millions) $12.8 $16.0 Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places. $14.4 a. What is Sheldon's unlevered horizon value of operations at Year 3? million b. What is the current unlevered value of operations? million c. What is horizon value of the tax shield at Year 3? $ million d. What is the current value of the tax shield? million e. What is the current total value of the company? million
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