Save Submit Assignment for Grading Problem 17.03 (Compressed APV Model with Constant Growth) Question 3 of 11 Check My Work (8 remaining) eBook Video Compressed APV Model with Constant Growth An unlevered firm has a value of $850 million. An otherwise identical but levered firm has $50 million in debt at a 4% Interest rate, which is its pre-tax cost of debt. Its unlevered cost of equity is 11%. After Year 1, free cash flows and tax savings are expected to grow at a constant rate of 2%. Assuming the corporate tax rate is 25%, use the compressed adjusted presint value model to determine the value of the levered firm. (Hint: The Interest expense at Year 1 is based on the current level of debt.) Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round Intermediate calculations. Round your answer to two decimal places. $ 383.3 million Hide Feedback Incorrect Check My Work (8 remaining) 0-Icon Key