Sillery Manufacturing has an expected EBIT of $$67,000$

in perpetuity and a tax rate of $35\%.$ The firm has $$139,000$ in

outstanding debt at an interest rate of $6\mathrm{.}85\%,$ and its unlevered cost of

capital is $10\mathrm{.}25\%.$ What is the value of the firm according to M&M

Proposition I with taxes? Should the company change its debt$$equity

ratio if the goal is to maximize the value of the firm? Explain.