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Gartner Systems has no debt and an equity cost of capital of 9 . Gartner's current market capitalization is $96 million, and its free cash flows are...
Gartner Systems has no debt and an equity cost of capital of 9.9%. Gartner's current market capitalization is $96 million, and its free cash flows are expected to grow at 2.9 %
per year. Gartner's corporate tax rate is 39%. Investors pay tax rates of 40% on interest income and 18% on equity income.
Suppose instead Gartner decides to maintain a 50% debt-to-value ratio going forward. If Gartner's debt cost of capital is 7.83%, what will Gartner's levered value be in this case?