Use the below information to value the debt in a levered company with annual perpetual cash flows from assets that grow. The next cash flow will be generated in one year from now. Data on a Levered Firm with Perpetual Cash Flows Item abbreviation Value Item full name FFCF (millions) $30.5 Firm free cash flow (or Cash Flow from Assets) g 2% pa Growth rate of OFCF rD 3% pa Cost of debt rEL 6% pa Cost of levered equity D/VL 35% pa Debt to assets ratio, where the asset value includes tax shields tc 30% Corporate tax rate

The current value of debt is

a. 361.86

b. 405.12

c. 446.63

d. 1157.5

e. 672.03