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)	$4.5	Firm free cash flow (or Cash Flow from Assets)
g	2% pa	Growth rate of OFCF
rD	3% pa	Cost of debt
rEL	9.5% pa	Cost of levered equity
D/VL	60% pa	Debt to assets ratio, where the asset value includes tax shields
tc	30%	Corporate tax rate

The current value of debt is

a.

75.00

b.

147.06

c.

50.00

d.

43.63

e.

88.24