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Business, 16.04.2020 17:50 electrofy456

Restex has a debt-equity ratio of 0.85, an equity cost of capital of 12 %, and a debt cost of capital of 7 %. Restex's corporate tax rate is 40 %, and its market capitalization is $ 220 million. a. If Restex's free cash flow is expected to be $ 10 million one year from now and will grow at a constant rate, what expected future growth rate is consistent with Restex's current market value? b. Estimate the value of Restex's interest tax shield.

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Restex has a debt-equity ratio of 0.85, an equity cost of capital of 12 %, and a debt cost of capita...
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