Use the following information to value a mature levered company with growing annual perpetual cash flows and a constant debt-to-equity ratio. The cash flow at time 1 will be generated in one year from now. Assume the firm's debt funding comprises annual fixed coupon bonds that all have the same seniority and coupon rate. When these bonds mature, new bonds will be re-issued, and so on in perpetuity. The yield curve is flat.

Data on a Levered Firm with Perpetual Cash Flows
	Value	Item full name
	$109.2m	Operating free cash flow at time 1
	$98.4m	Equity free cash flow at time 1
	3% pa	Growth rate of OFCF, FFCF, EFCF and Debt cash flow
	8.9% pa	Weighted average cost of capital before tax
	5% pa	Bond yield
	44% pa	Cost or required return of levered equity
	900%	Debt to Equity ratio, where the asset value includes tax shields
	21m	Number of shares
	30%	Corporate tax rate

The firms current share price is:

a.

$88.1356

b.

$14.7215

c.

$11.4286

d.

$52.6485

e.

$26.1501