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Use the below information to value the debt in a levered company with annual perpetual...

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

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