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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

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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 Value Item full name abbreviation FFCF $4.5 Firm free cash flow (or Cash Flow from Assets) (millions) g 2% pa Growth rate of OFCF 3% pa Cost of debt TEL 9.5% pa Cost of levered equity DIVL 60% pa Debt to assets ratio, where the asset value includes tax shields to 30% Corporate tax rate The current value of debt is a. 50.00 ob. 88.24 O c. 75.00 d. 147.06 O e. 43.63

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