Marpor Industries has no debt and expects to generate free cash ows of $15 million each year. Marpor believes that if it permanently increases its level of debt to $35 million, the risk of nancial distress may cause it to lose some customers and receive less favourable terms from its suppliers. As a result, Marpor's expected free cash ows with debt will be only $14 million per year. Suppose Marpor's tax rate is 30%, the risk-free rate is 4%, the expected return of the market is 14%, and the beta of Marpor's free cash flows is 1.1 (with or without leverage). a. Estimate Marpor's value without leverage. b. Estimate Marpor's value with the new leverage