Question: Comptronix is a listed tech firm, whose debt and equity have market values of $ 3 0 0 million and $ 4 5 0 million,

Comptronix is a listed tech firm, whose debt and equity have market values of $300 million and $450 million, respectively. Comptronix shares have a beta of 1.45, while the firm's before-tax cost of debt is 6.31%. The risk-free interest rate is 4% p.a. and the market risk premium is 6% p.a. Comptronix's free cash flow at the end of the current year is expected to be $25 million, and its free cash flows are expected to grow at 3% p.a. What is the present value of Comptronix's debt tax shield, if it pays tax at 30% and incurs no financial distress costs?

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