Estimate the value of? restex interest tax shield

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Reference no: EM132001601

Restex has a? debt-equity ratio of 0.51 ?, an equity cost of capital of 15 % ?, and a debt cost of capital of 10 % . ?Restex's corporate tax rate is 38 % ?, and its market capitalization is $ 268 million.

a. If? Restex's free cash flow is expected to be $ 10 million one year from now and will grow at a constant? rate, what expected future growth rate is consistent with? Restex's current market? value %? round to two decimal places?

b. Estimate the value of? Restex's interest tax shield. round to the nearest million.

Reference no: EM132001601

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