Mikos Processed Foods is currently valued at $500 million. Mikos will be repurchasing $100 million of its

Question:

Mikos Processed Foods is currently valued at $500 million. Mikos will be repurchasing $100 million of its equity by issuing a non-maturing debt issue at a 10 percent annual interest rate. Mikos is subject to a 30 percent marginal tax rate. If all of the Modigliani and Miller assumptions apply, except the assumption that there are no taxes, what will be the value of Mikos after the recapitalization?