For a particular firm, the value of its debt is $1,300 and the expected free cash flow on all future dates forever is $500. Given the firm’s risk exposure, the unlevered cost of equity capital is 11.00%. The corporate tax rate is 33.00%.

Distress cost is modeled as a quadratic function – specifically, as 0.00008 times debt squared. Plot the value of an unlevered firm, the value of a levered firm with a tax shield, and the value of a levered firm with a tax shield and distress cost against the amount of debt