Schwarzentraub Industries' expected free cash flow for the year is $300,000; in the future free cash flow is expected to grow at a rate of 8%. The company currently has no debt, and its cost of equity is 12%. Its tax rate is 40%.

Find V_U. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place. $

Find V_L if Schwarzentraub uses $3 million in debt with a cost of 7%. Use the APV model that allows for growth. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place. $ million Find r_sL. Round your answer to one decimal place. r_sL = %

Based on V_U from part a, find V_L using the MM model (with taxes) if Schwarzentraub uses $3 million in 7% debt. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place. $ million Find r_sL. Round your answer to one decimal place. r_sL = %

Explain the difference between your answers to parts b and c.