Schwarzentraub Industries' expected free cash flow for the year is $350,000; in the future, free cash flow is expected to grow at a rate of 9%. The company currently has no debt, and its cost of equity is 13%. Its tax rate is 40%.

Find VU. 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 VL if Schwarzentraub uses $6 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 rsL. Round your answer to one decimal place. rsL = %

Based on VU from part a, find VL using the MM model (with taxes) if Schwarzentraub uses $6 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 rsL. Round your answer to one decimal place. rsL = %

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

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