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 × Debt_N × R_e × (1 + g) / (R_e − 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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