Restex has a debt-equity ratio of

0.79,

an equity cost of capital of

17%,

and a debt cost of capital of

7%.

Restex's corporate tax rate is

21%,

and its market capitalization is

$206

million.

a. If Restex's free cash flow is expected to be

$8

million one year from now and will grow at a constant rate, what expected future growth rate is consistent with Restex's current market value?

b. Estimate the value of Restex's interest tax shield.