Data on a Levered Firm with Perpetual Cash Flows Item Abbreviation Value Expected earnings before interest, tax, depreciation and amortisation in one year EBITDA1 $54m Expected depreciation and amortisation in one year DeprAndAmort1 $4m Expected capital expenditure in one year CapEx1 $5m Expected increase in net operating working capital in one year DeltaNOWC1 $2m Expected interest expense in one year IntExp1 $10m Growth rate of cash flow from assets, levered and unlevered g 4% Cost of debt rD 5% Cost of levered equity rEL 15% Debt to assets ratio, where the asset value includes tax shields D/VL 40% Corporate tax rate tc 30% Number of shares n 100m

Which of the following statements is NOT correct? Select one:

a. The next expected OFCF is $32m.

b. The interest tax shield benefit in the first year $3m, paid at the end of that year.

c. The current market cap of equity is $300m.

d. The current share price is $3.

e. The next expected equity free cash flow (EFCF) is $35m.