Herculio Mining has net operating income of $6 million; there is $60 million of debt outstanding with a required rate of return of 6 percent; the required rate of return on the industry is 12 percent; and the corporate tax rate is 35 percent. Assume there are corporate taxes but no personal taxes.

a) Calculate total income available to investors. (Marks: 4) Please show your calculations clearly

b) Determine the present value of the interest tax shield of Herculio Mining, as well as the total value of the firm. (Marks: 3) Please show your calculations clearly

c) Determine the gain from leverage if personal taxes of 18 percent on stock income and 28 percent on debt income exist. (Marks: 3) Please show your calculations clearly