After Modigliani and Miller's $($MM$)$ original no$-$tax theory, they went on to develop another theory that included corporate taxes. Subsequently, Miller developed another theory that included the effects of both corporate and personal taxes.

Complete the following sentence based on your understanding of the MM Model with corporate taxes:

When personal taxes are included in the MM model, the taxes that stockholders pay on their bond and equity income the benefit created by the tax savings on corporate debt.

Doggie Due Lending Company has no debt, and a value of $$65\mathrm{.}000$ million. Fat Cats Bankshares is otherwise identical

will offset

in its capital structure. Under the different models, what is the value of Fat Cats Bankshares if its corporate tax rate is zJro, cre persunal tax rate on equity is $12\%,$ and the personal tax rate on debt is $27\%?($Note: Do not round intermediate calculations.$)$

Model

Fat Cats Bankshares Value

MM without taxes

MM with corporate taxes

Miller with corporate and personal taxes $($Answer each of the dropdown boxes please$)$