Milton Industries expects free cash flow of $$12$ million each year. The corporate tax rate is $22\%,$ and its

unlevered cost of equity is $12\%.$ The firm also has outstanding debt of $$40$ million and it expects to

maintain this amount permanently.

What is the value of Milton Industries with leverage?

a$)85,973,333$

b$)88,573,333$

c$)89,646,444$

d$)90,125,564$

What is the value of equity of Milton Industries with leverage?

a$)76,573,333$

b$)73,973,333$

c$)77,646,444$

d$)78,125,564$