16. E-space Enterprises expected to have free cash flow in the coming year
of $4 million, and this free cash flow is expected to grow at a rate of 3%
per year thereafter. E-space has an equity cost of capital of 13%, a debt
cost of capital of 7%, and it has a 21% corporate tax rate.
If E-space currently maintains a .5 debt to equity ratio, then the value of
E-space 's interest tax shield is closest to:
(A) $3 million.
(B)$6 million.
(C)$9 million.
(D)$12 million.
(E) $15 million.
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