Question
Milton Industries expects free cash flow of $12 million each year. Milton's corporate tax rate is 21%, and its unlevered cost of capital is 9%.
Milton Industries expects free cash flow of $12 million each year. Milton's corporate tax rate is 21%, and its unlevered cost of capital is 9%. Milton also has outstanding debt of $83.89 million, and it expects to maintain this level of debt permanently.
a. What is the value of Milton Industries without leverage?
b. What is the value of Milton Industries with leverage?
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The Complete Guide To Property Finance
Authors: Richard W J Brown
1st Edition
1739832027, 978-1739832025
