Estimate the value of? restex interest tax shield

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Reference no: EM133495969

Restex has a? debt-equity ratio of 0.81?, an equity cost of capital of 14%?, and a debt cost of capital of 11%. ?Restex's corporate tax rate is 30%?, and its market capitalization is $275 million.

1. If? Restex's free cash flow is expected to be $5 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?

2. Estimate the value of? Restex's interest tax shield.

Reference no: EM133495969

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