solve this problem After reading all about the tax advantages of having a high

leverage ratio, the CEO of LevCo is considering a leveraged

recapitalization and wants to know the value of his firm

subsequent to the recap. The firm currently has $$27$ million

in assets and $$12$ million in debt and is interested in taking

on an additional $$8\mathrm{.}0$ million in debt. LevCo's debt yields

$8\%$ and is expected to the new debt level in perpetuity.

LevCo is expected to produce unlevered cash flows $($i$.$e$.,$

CFA$)$ next year of $$6\mathrm{.}2$ million per year, growing at $3\%$

annually.

LevCo's closest competitor, a pure$-$play firm in the same

business as LevCo, has a debt$-$to$-$equity ratio of $0\mathrm{.}5$ and an

equity beta of $1\mathrm{.}25.$ Ten$-$year treasuries currently yield

$2\mathrm{.}3\%$ and the expected return on the S&P $500$ is $10\mathrm{.}0\%$ per

annum. The marginal corporate tax rate is $21\%.$

Using the information above regarding LevCo and if you

discount the interest tax shields at the unlevered cost of

equity, what is the value of the enterprise $($market value of

assets$)$ using the APV method? Enter your response in

millions, rounded to two decimal places.