● Two firms, A and K are identical in all respect (and belong to the same risk class) except their Leverage. While firm A is an all equity firm, the other one is a levered firm `3,00,000, 8% Debt Capital. Both the firms have identical expected EBIT of `1,50,000. Equity Capitalisation rate of firm A is 15%. Calculate the value of the firms and Equity Capitalisation rate of firm K.