Over the next six years (i.e. t=1~6), Circle-D Inc. expects to generate an annual revenue of $1,600 million and incur an annual operating costs of $500 million, annual interest expense of $100 million, annual depreciation of $110 million, additional annual capital expenditure of $90 million, and the annual increase in non-cash net working capital of $50million. Beyond year six, all the aforementioned accounts (i.e. annual revenue, annual operating costs, annual interest expense, annual depreciation, additional annual capital expenditure, and increase in non-cash networking capital) are expected to grow at 1% per year indefinitely. Your research suggests that the cost of unlevered equity is 13.1%. The pre-tax cost of debt is expected to remain stable at 5.75% as the amount of debt outstanding grows. Tax rate is 21%. What is the value of the firm if it were unlevered? [20 points] b. What is the present value of the firm's tax shield? [10 points] What is the overall levered firm value? [5 points] a. C. Over the next six years (i.e. t=1~6), Circle-D Inc. expects to generate an annual revenue of $1,600 million and incur an annual operating costs of $500 million, annual interest expense of $100 million, annual depreciation of $110 million, additional annual capital expenditure of $90 million, and the annual increase in non-cash net working capital of $50million. Beyond year six, all the aforementioned accounts (i.e. annual revenue, annual operating costs, annual interest expense, annual depreciation, additional annual capital expenditure, and increase in non-cash networking capital) are expected to grow at 1% per year indefinitely. Your research suggests that the cost of unlevered equity is 13.1%. The pre-tax cost of debt is expected to remain stable at 5.75% as the amount of debt outstanding grows. Tax rate is 21%. What is the value of the firm if it were unlevered? [20 points] b. What is the present value of the firm's tax shield? [10 points] What is the overall levered firm value? [5 points] a. C