Valuation during tax exemption period

Hi everyone,

I’m doing a DCF valuation on a company (based on FCFF) having debt but also having a 5-year corporate income tax exemption period. My method of valuation is to use a pre-tax WACC for the cash flows during the tax exemption period and then use a WACC that incorporates the tax rate on the cost of debt.

But my colleague says that I should also include in the valuation the present value of the (latent) tax asset resulting from the non-payment of tax for 5 years, that is, the present value of the money saved by having this tax exemption.

What do you think? Should I also calculate this PV of tax asset and add it to the DCF reuslt? If yes, what discount rate should I use to discount the tax asset?

Thank you for your help.