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Posted on Jul 20, 2024

Generates Inc is expecting to have $14 billion in free cash flows one year from now which will grow at 1.2% in perpetuity. The company

Generates Inc is expecting to have $14 billion in free cash flows one year from now which will grow at 1.2% in perpetuity. The company has a debt to equity ratio of 1.6 and a WACC of 8%. The required return of unlevered shareholders is 11.5%.

What is the present value of the interest tax shield following the model by Miller and Modigliani with taxes and a constant debt to value ratio?

PLEASE ANSWER ASAP!!!!

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