Marpor Industries has no debt and expects to generate free cash flows of $$17$ million each year. Marpor believes that if it permanently increases its level of debt to $$40$million$,$ the risk of financial distress may cause it to lose some customers and receive less favourable terms from its suppliers. As a$$ result, Marpor's expected free cash flows with debt will be only $$16$ million per year. Suppose$$ Marpor's tax rate is $40\%,$ the$$ risk$-$free rate is $3\%,$ the expected return of the market is $15\%,$ and the beta of$$ Marpor's free cash flows is $1\mathrm{.}3($with or without$$ leverage$).$

a$.$ Estimate$$ Marpor's value without leverage.

b$.$ Estimate$$ Marpor's value with the new leverage.