Any help would be appreciated. Thank you!

Valuing rms using the "Adjusted Present Value" method Andalusian Inc wants to acquire another rm in its industry for $120 million The acquisition would increase Andalusian's free cash ow by _$5 million in Year 1 (this is FCF1)_ and this contribution is expected to grow at a rate of g = 3% every year thereafter. Andalusian currently maintains a D/ E of 1 (this is not D/(D+E) ), its corporate tax rate is 21%, its cost of debt rD is 4%, and its cost of equity rE is 8%. Andalusian Inc will keep a constant D/E ratio for the acquisition. Calculate: 1) Andalusian's unlevered cost of capital rU Given that Andalusian issues new debt of $60 million initially to fund the acquisition 2) calculate the present value of the interest tax shield 3) the total value of the acquisition using the APV method Hint: to calculate the interest tax shield, rst calculate the interest tax shield in Year 1, given that the company issued $50 million in debt in Year 0. Then, compute the present value of the tax shield assuming a perpetual growth