7 Start with the partial model in the file Ch17 P12 Build a Model.xlsx on the textbook's Web site. Kasperov Corporation 8 has an unlevered cost of equity of 12% and is taxed at a 40% rate. The 4-year forecasts of free cash floyv and interest expenses are shown in the following table; free cash flow and interest expenses are expected to grow at a 5% rate o after Year 4. Using the compressed APV model, answer the following questions. 12 13 INPUTS (In millions Projected Year 200.0 $100.0 280.0 $120.0 4 340.0 $140.0 Free cash flow 320.0 $120.0 6 Interest expense 8Long-term growth rate 5% 40% 12.00% Tax rate O Unlevered cost of equit 21 2 a. Calculate the estimated horizon value of unlevered operations at Year 4 (i.e., immediately after the Ybar-4 free cash 3 flow). 4 Current Projected 2 4 7 Free cash flow 8Horizon unlevered value of operations $200.0 $280.0 $320.0 $340.0 0 b. Calculate the current value of unlevered operations. 1 2 Current value of unlevered operations 5 a. Calculate the estimated horizon value of the tax shield at Year 4 (i.e., immediately after the Year-4 free cash flow) 6 Current Projected 8 9 Interest expense $100.0 $40.0 $120.0 $48.0 $120.0 $48.0 $140.0 $56.0 Tax savings 1Horizon unlevered value of operations 3 d. Calculate the current value of the tax shield. 5 Current value of unlevered operations 61 17 alculate the current total value 0 Unlevered value of operations 1 Value of tax shield Total value 7 Start with the partial model in the file Ch17 P12 Build a Model.xlsx on the textbook's Web site. Kasperov Corporation 8 has an unlevered cost of equity of 12% and is taxed at a 40% rate. The 4-year forecasts of free cash floyv and interest expenses are shown in the following table; free cash flow and interest expenses are expected to grow at a 5% rate o after Year 4. Using the compressed APV model, answer the following questions. 12 13 INPUTS (In millions Projected Year 200.0 $100.0 280.0 $120.0 4 340.0 $140.0 Free cash flow 320.0 $120.0 6 Interest expense 8Long-term growth rate 5% 40% 12.00% Tax rate O Unlevered cost of equit 21 2 a. Calculate the estimated horizon value of unlevered operations at Year 4 (i.e., immediately after the Ybar-4 free cash 3 flow). 4 Current Projected 2 4 7 Free cash flow 8Horizon unlevered value of operations $200.0 $280.0 $320.0 $340.0 0 b. Calculate the current value of unlevered operations. 1 2 Current value of unlevered operations 5 a. Calculate the estimated horizon value of the tax shield at Year 4 (i.e., immediately after the Year-4 free cash flow) 6 Current Projected 8 9 Interest expense $100.0 $40.0 $120.0 $48.0 $120.0 $48.0 $140.0 $56.0 Tax savings 1Horizon unlevered value of operations 3 d. Calculate the current value of the tax shield. 5 Current value of unlevered operations 61 17 alculate the current total value 0 Unlevered value of operations 1 Value of tax shield Total value