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Sheldon Corporation projects the following free cash flows (FCFs) and interest expenses for the next 3 years, after which FCF and interest expenses are expected

Sheldon Corporation projects the following free cash flows (FCFs) and interest expenses for the next 3 years, after which FCF and interest expenses are expected to grow at a constant 8% rate. Sheldon's unlevered cost of equity is 14% its tax rate is 25%.

Year
1 2 3
Free cash flow ($ millions) $20.0 $30.0 $40.0
Interest expense ($ millions) $12.8 $14.4 $16.0

Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answers to two decimal places.

  1. What is Sheldon's unlevered horizon value of operations at Year 3?

    $ million

  2. What is the current unlevered value of operations?

    $ million

  3. What is horizon value of the tax shield at Year 3?

    $ million

  4. What is the current value of the tax shield?

    $ million

  5. What is the current total value of the company?

    $ million

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