Lawrence Apples (LA) expects free cash flow in the coming year of $4.25 million. Its free cash flow is expected to grow at a rate of 4% per year thereafter. LA has an equity cost of capital of 10% and a debt cost of capital of 6%. It has a corporate tax rate of 21%.

If LA maintains a debt/equity ratio of 0.75, what is the value of its interest tax shield?

What is the pre-tax WACC?

What is the value of the firm without leverage?

What is the WACC with taxes?

What is the value of the levered firm?