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Based on the attached spreadsheet (loosely based on the APV example in class), compute the fol- lowing with a 34% tax rate: (a) Firm value according
Based on the attached spreadsheet (loosely based on the APV example in class), compute the fol- lowing with a 34% tax rate:
- (a) Firm value according to APV where the present value of the interest tax shield is computed using Pre-tax WACC, not the cost of debt. (10 points)
- (b) Firm value according to CCF. (10 points)
The APV and CCF valuations will be identical. Note that depreciation, CAPEX, and change in NWC are all zero.