Question $14(1\mathrm{.}5$ points$)$

The CFO of Spotify Inc. has summarized its free cash flows for the next three years in the following table. The cash flows are expected to grow at a constant growth rate $2\mathrm{.}00\%$ afterwards. The company has been maintaining a costant gearing ratio of $0\mathrm{.}25,$ and has no plans to change this ratio in the future. Under this financing strategy, the cost of equity and cost of debt capitals are, respectively, $12\%$ and $5\%.$ The normative corporate tax rate is $25\%.$ What is the value of Spotify's tax shield?

$\backslash$table$[[$Years$,1,2,3],[$FCFs$,12\mathrm{.}70,13\mathrm{.}30,13\mathrm{.}60]]$

Instructions: Round the result to two decimal places. For example if you get a result of $0\mathrm{.}3567$ then write $0\mathrm{.}36$ in the answer box below.

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