2. [10 pm] Your rm has two divisions, (it) and (B). Division {131) is expected to generate unlevered free cash ows (FCFs) of $1513 million annwtlly in perpetuity. Division (B) is expected to generate FCFs of $220 million annually in perpetuity. Both divisions generate the rst free cash ow one year from today. The corporate tax rate is 411%. The comparable rm for Division (11), called ratCD. has a total market value of $63G million. fitCo. has expected FCFs of $60M per year, forever. firCo. is expected to keep its amount of debt constant at EDDIE, forever. The comparable rm for Division (B), called CompB has a market value of $200 million and continuously rebalances to a debttovalue ratio of 50%. CompB has 58E\" million of identiable assets. CompB's expected rentrn on debt is 5%. CompB's expected return on equity is 1%. a. ssume neither division Will ever take on leverage. What is the value of each division? b. Now assume that both divisions continuously rebalance to a debttoequity ratio of %. The cost of debt for both divisions is 4%. What is the value of each division