Marpor Industries has no debt and expects to generate free cash flows of $ 16 million each year. Marpor believes that if it permanently increases its level of debt to $ 45 million, the risk of financial distress may cause it to lose some customers and receive less favorable terms from its suppliers. As a result, Marpor's expected free cash flows with debt will be only $ 15 million per year. Suppose Marpor's tax rate is 21 % , the risk-free rate is 4 % , the expected return of the market is 16 % , and the beta of Marpor's free cash flows is 1.2 (with or without leverage). a. Estimate Marpor's value without leverage. b. Estimate Marpor's value with the new leverage.