ation ▁model ▁looks ▁similar ▁to ▁a ▁standard ▁D CF ▁model . ▁However , ▁instead ▁of ▁W AC C , ▁c ash ▁flows ▁would ▁be ▁disc ount ed ▁at ▁the ▁un le ver ed ▁cost ▁of ▁equ ity , ▁and ▁tax ▁shield s ▁at ▁either ▁the ▁cost ▁of ▁deb t ▁( My ers ) ▁or ▁following ▁later ▁academ ics ▁also ▁with ▁the ▁un le ver ed ▁cost ▁of ▁equ ity . ▁ ▁See ▁Ham ada ' s ▁equation . ▁AP V ▁and ▁the ▁standard ▁D CF ▁approaches ▁should ▁give ▁the ▁identical ▁result ▁if ▁the ▁capital ▁structure ▁remains ▁stable . ▁ ▁According ▁to ▁My ers , ▁the ▁value ▁of ▁the ▁lever ed ▁firm ▁( Value ▁lever ed , ▁V l ) ▁is ▁equal ▁to ▁the ▁value ▁of ▁the ▁firm ▁with ▁no ▁deb t ▁( Value ▁un le ver ed , ▁V u ) ▁plus ▁the ▁present ▁value ▁of ▁the ▁tax ▁sav ings ▁due ▁to ▁the ▁tax ▁ded uct ibility ▁of ▁interest ▁pay ments , ▁the ▁so - called ▁value ▁of ▁the ▁tax ▁shield ▁( V TS ). ▁My ers ▁propos es ▁calculating ▁the ▁V TS ▁by ▁disc ount ing ▁the ▁tax ▁sav ings ▁at ▁the ▁cost ▁of ▁deb t ▁( K d ). ▁The ▁argument ▁is ▁that ▁the ▁risk ▁of ▁the ▁tax ▁saving ▁ar ising ▁from ▁the ▁use ▁of ▁deb t ▁is ▁the ▁same ▁as ▁the ▁risk ▁of ▁the ▁deb t . ▁ ▁As ▁mentioned , ▁the ▁method ▁is ▁to ▁calculate ▁the ▁N P V ▁of ▁the ▁project ▁as ▁if ▁it ▁is ▁all - equ