5 If the Miller (debt and taxes) model holds and capital gains tax is 28 per cent, corporation tax is 18 per cent and personal tax rate on interest income is 45 per cent, estimate the value of Biller Industries plc. (15 marks)

Biller Industries plc is a global haulage equipment and scaffolding manufacturer. The company has never borrowed before but feels that, in order to maximize growth and increase value, a debt issue is required.
Currently the firm has 50 million shares outstanding with a share price of £1.50. The profit before taxes is forecast to be £25 million. Biller Industries requires £30 million to fund its expansion plans. The firm feels that it could borrow £45 million and use the additional £15 million to also buy back shares in the company.
The corporate tax rate is 18 per cent.