8. Now consider two capital structure theories: Modigliani-Miller with corporate taxes (MM63) and the Miller model....

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8. Now consider two capital structure theories: Modigliani-Miller with corporate taxes (MM63) and the Miller model. a. What would Aspeon's value at $75.0 million of debt be, according to the MM63 model? b. What would the firm's value be, according to the Miller model? (Assume that the per- sonal tax rate on income from stock [Ts] is 25 percent, and the personal tax rate on income from debt [Td] is 30 percent. Also, use $120 million as the value of the unlevered firm [VU] in both the MM63 and Miller models, even though it should be less in the Miller model.) Why do the values differ when calculated by the equations in Question 3, the MM63 model, and the Miller model? (Hint: Consider the assumptions that underlie each model.) 8. Now consider two capital structure theories: Modigliani-Miller with corporate taxes (MM63) and the Miller model. a. What would Aspeon's value at $75.0 million of debt be, according to the MM63 model? b. What would the firm's value be, according to the Miller model? (Assume that the per- sonal tax rate on income from stock [Ts] is 25 percent, and the personal tax rate on income from debt [Td] is 30 percent. Also, use $120 million as the value of the unlevered firm [VU] in both the MM63 and Miller models, even though it should be less in the Miller model.) Why do the values differ when calculated by the equations in Question 3, the MM63 model, and the Miller model? (Hint: Consider the assumptions that underlie each model.)

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