Stuvenire Merger Valuation with Change in Copital Structure \begin{tabular}{|c|c|} \hline Dobt & 30.00% \\ \hline Equily & 70.004 \\ \hline Number of common shares outstanding & 1,000,000 \\ \hline Current debt amount & $9.570.000 \\ \hline Debt interest rate & 7.50% \\ \hline Risk-free rate & 7.00% \\ \hline Market risk premium & 800% \\ \hline Taxrate & 3500% \\ \hline Bota & 130 \\ \hline Interest payments, Years 1 - 3 & 51,600,000 \\ \hline Growth rate & 500% \\ \hline Free cosh flow, Year 1 & 32,400,000 \\ \hline Free cash fow, Year 2 & $3,100,000 \\ \hline Free cash flow, Year 3 & $3,300,000 \\ \hline Eree cash fow Year 4 & $3,630,000 \\ \hline Level of dobt, Year 3 & 54,100,000 \\ \hline New interest rate at higher debtlevel & 800x \\ \hline New targot capital structure: & \\ \hline Dabt & 45005 \\ \hline Equity. & ss.006s. \\ \hline \end{tabular} Calculate target firm's levered cost of equity ifs Calculate turpet firm's unlovered cost of equity ifs Cifeutate target firm's unlovered value: Unlevernd horizon value of FCF Untevorod value of operitions Cifcufate vitio of finterest tax shields: Tax shield, Your 1 Tax ohield, Yoar 2 Tax shiald, Yoar 3 Taxiheld, Hocizon valun Valoe of tax ahinlds Value of operitions Targut forms equiry valve is acquiring firm Per thate valien io acquiring firm