1. Suppose you have obtained the following information on NN, Inc. The firm's equity beta is 1.0, the firm's debt beta is 0.2, the risk-free rate is 3%, and the market risk premium is 6%. Next year's free cash flow to the firm is $600,000 and the growth rate of cash flows going forward is expected to be zero. The current market value of debt is $10,000,000 and the current market value of equity is $2,000,000. The tax rate is 0%, so there is no tax shield on debt. What is the value of the firm?

2. Suppose you have obtained the following information on NN. The firm's equity beta is 1.5, the firm's debt beta is 0.5, the risk-free rate is 3%, and the market risk premium is 6%. Next year's free cash flow to the firm is $600,000 and the growth rate of cash flows going forward is 2%. The current market value of debt is $10,000,000 and the current market value of equity is $4,400,000. The tax rate is 40%. The growth rate of the tax shield is expected to be 2%. What is the value of the firm using WACC (i.e. the MM-with-taxes WACC formula)?