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NuTronics Inc. is currently unlevered with a value of $1,000,000 and a marginal corporate tax rate of 40%. There are no personal taxes. The firm

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NuTronics Inc. is currently unlevered with a value of $1,000,000 and a marginal corporate tax rate of 40%. There are no personal taxes. The firm estimates the PV of its financial distress costs as a function of its leverage ratio (D/V) and unlevered value (V_u): PV of financial distress = V_u x ((D/V_u)^4). What is the firm's levered value if it issues $500,000 of perpetual debt and repurchases shares with the funds? S1,000,000 S1.137, 500 S1, 020,000 S1.262.500

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