What is the value of milton industries with leverage

Reference no: EM132000430

Question: Milton Industries expects free cash flows of $4 million each year. Milton's corporate tax rate is 35%, and its unlevered cost of capital is 13%. Milton also has outstanding debt of $8.07 million, and it expects to maintain this level of debt permanently.

a. What is the value of Milton Industries without leverage?

b. What is the value of Milton Industries with leverage?

Reference no: EM132000430

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