Restex has a debt-equity ratio of 073 an equity cost of, Ask an Expert

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Restex has a debt-equity ratio of 0.73, an equity cost of capital of 13%?, and a debt cost of capital of 8%. Restex's corporate tax rate is 30%, and its market capitalization is $225 million.

a. If Restex's free cash flow is expected to be $4 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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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92663671

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