Use the below information to value a levered company with constant annual perpetual cash flows from assets. The next cash flow will be generated in on year from now, so a perpetuity can be used to value this firm. Both the operating free cash flow (OFCF) and firm free cash flow (FFCF) are constant (but not equal to each other).

Data on a Levered Firm with Perpetual Cash Flows

Item

Abbreviation

Value

Operating Free Cash Flow

OFCF

$108m

Firm free cash flow (or cash flow from assets levered)

FFCF

$112.5m

Growth rate of cash flow from assets, levered and unlevered

g

2.5%

Weighted average cost of capital before tax

WACCBeforeTax

10%

Weighted average cost of capital after tax

WACCAfterTax

9.7%

Cost of debt

rD

5%

Cost of levered equity

rEL

11.25%

Debt to assets ratio, where the asset value includes tax shields

D/VL

20%

Number of shares

n

100m

Corporate tax rate

tc

30%

What is the firm's current share price?