$16\mathrm{.}8$ M&M Proposition $2$: Mikos Processed Foods is currently

valued at million. Mikos will be repurchasing mil$-$

lion of its equity by issuing a perpetual debt issue at a $10$ per

cent annual interest rate. Mikos is subject to a $30$ per cent mar$-$

ginal tax rate. Given all of the Modigliani and Miller assump$-$

tions, except the assumption that there are no taxes, what will

be the value of Mikos after the recapitalisation?