An unlevered firm has a value of $100 millions. An otherwise identical but levered firm has $40 millions in debt and a 5% cost of debt. Assuming a corporate tax rate of 35%, and a personal tax rate of 30%, long term capital gain tax rate of 12% and financial distress cost of 10% of debt. What is the value of the levered firm? $108.5 millions $101.6 millions $103.3 millions