Question: Question 5 Consider the following table which provides data for a levered firm. Assume annual cash flows will grow in perpetuity. Not yet saved Value

Question 5 Consider the following table which provides data for a

Question 5 Consider the following table which provides data for a levered firm. Assume annual cash flows will grow in perpetuity. Not yet saved Value Item full name Marked out of 3.00 Flag question Item abbreviation OFCF (millions) g TEL E/V to $5.8 2% pa 4% pa 8.5% pa 70% pa 30% Operating free cash flow Growth rate of OFCF Cost of debt Cost of levered equity Equity to assets ratio, where the asset value includes tax shields Corporate tax rate A Calculate the current value of the levered firm (2 marks) Calculate the current value of the levered equity (1 mark) B

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