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Imagine that your firm has an expected FCF of $X next year. You also expect that the FCFs will grow 2 % each year indefinitely.

Imagine that your firm has an expected FCF of $X next year. You also expect that the FCFs will grow 2% each year indefinitely. Your firms capital structure is two-thirds equity and one-third debt while the cost of equity and cost of debt are 12% and 4.5%, respectively. The corporate tax rate is 20%. If the PV (Interest Tax Shield) is $9M, what is the value of X (i.e., first years FCF)?

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