Wayfarer Company has no debt, and its value is $800.000 million. Adventures Inc. is otherwise identical but levered with $320.000 million in debt. Under the different models, what is the value of Adventures Inc. if its corporate tax rate is 27%, the personal tax rate on equity is 12%, and the personal tax rate on debt is 28%? Adventures Inc. Value (Millions of dollars) Model MM without tax MM with corporate taxes Miller with corporate and personal taxes Consider the following information: Adding personal taxes to the model lowers, but does not eliminate, the benefit from corporate debt. In the United States, taxes on capital gains are lower than on ordinary income and can be deferred. The effective rate on stock income is normally less than that on bond income, and although the personal tax on debt will lower the gain from corporate debt, it is not usually enough to eliminate it. Therefore, there is still a gain from leverage using Miller's model, as well as the MM model with corporate tax. Is the preceding information correct? No Yes