In part C, what is the formula of PV(Tax Shields), Could you explain those numbers in detail? How could we get those numbers out? Thank you!

(b) (2 points) What is D&Y's PVGO per share with this project? We can use -toEBIT+PVGO-PVGo -$20.91 + PVGO PlGO = $29.91. rA $60 (c) (8 points) D&Y now decides to finance its project with debt instead of earnings. Specifically, it is going to issue $100M one-period debt ($10 per share, cost ) in year 1, use it to make the investment, and then repay the principal plus interest in year 2. Then, D&Y will repeat the same procedure in years 2 to 5 (ie. it will issue $100M in debt in year 2, invest, and repay it in year 3, then do it again etc.) Overall, D&Y will have to make 5 interest payments. Use APV to calculate the new price per share with this financing. D&Y's cost of debt remains at 5%. Each interest payment is equal to 0.05 $100M- $5M or $0.5 per share. The interest tax shield per share is 0.4*$0.5 = $0.2. The first interest payment is made in year 2 and the last one is made in year 6. The APV per share is equal to APV -$29.91+ PV(Tar Shields)- 2.91 003 $0.2 01.035 -$30 PVGO 0.79 and the new price per share is P, = (1-t.)EBIT + APV = S90.60. $60