Question
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 6% 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 $14.4 $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. What is Sheldon's unlevered horizon value of operations at Year 3? $ million What is the current unlevered value of operations? $ million What is horizon value of the tax shield at Year 3? $ million What is the current value of the tax shield? $ million What is the current total value of the company?
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