Questions About the APV Model
Hey guys,
I was looking at the APV model on Macabus, and I was wondering how the equation for Terminal Value of Income Tax Shield came about.
It says it's TV ITS = t × DebtN × Re × (1 + g) / (Re − g)2
and I am curious on why there is a "^2" because the formula looks similar to the growing perpetuity formula.
It would be great if I could see the derivation of that formula because I am dying to know this.
Thanks!
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