question archive Goldmund AG has an unlevered cost of capital is 12% and expects unlevered free cash flow of $7 million each year
Goldmund AG has an unlevered cost of capital is 12% and expects unlevered free cash flow of $7 million each year
Subject:FinancePrice: Bought3
Goldmund AG has an unlevered cost of capital is 12% and expects unlevered
free cash flow of $7 million each year. The firm also has outstanding debt of $17.5 million and expects to maintain this level of debt permanently. Goldmund's corporate tax rate is 30%.
a) What is the value of Goldmund without leverage?
b) What is the present value of Goldmund's tax shield?
c) What is the value of Goldmund with leverage?
