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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 Value Item full name Item abbreviation $5.6 Firm free cash flow (or Cash Flow from Assets) FFCF (millions) g 2% pa Growth rate of OFCF 4% pa Cost of debt TEL 8% pa Cost of levered equity D/ 70% pa Debt to assets ratio, where the asset value includes tax shields 30% Corporate tax rate The current value of debt is O a. 237.29 O b. 166.10 O c. 52.50 O d. 144.63 e. 122.50

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