The Woodridge Hotels intends to acquire Wellington Resorts using new debt financing. The Woodridge estimates interest payments of $2 million dollars per year for 3 years after the acquisition. Expected free cash flows over the same period are $5 million, $6.5 million, and $8 million, respectively. Growth rate after this period is estimated to be 4%. Tax rate is 40%. Wellington's current WACC is 12% and unlevered cost of equity (rEU) is 15%. Wellington's capital structure will be different from its pre-merger capital structure if acquired by The Woodridge. Calculate the horizon value interest tax shield (HIVTS).

$13.8667 million

$7.5636 million

$18.91 million

None of the above