Using the WACC Method to Value Firms Mustang Corp is valuing a new division that is expected to generate FCF in year 1 of $7.5 million and that will grow at a rate of 2.5% per year in each of the subsequent years. Mustang has an equity cost of capital of re = 10%, a debt cost of capital of rd - 7%, a corporate tax rate of T -21%, and a debt-equity ratio of D/E = 0.3. What is the levered (after-tax) value VL of this division? Assume that it has average risk and the D/E ratio is constant