25. Firms A and B are similar in all respects, except that Firm A is an all equity firm with a value of $2,000,000, and Firm B has financial leverage with $500,000 of debt. Assume that the corporate tax rate is 30% and that interest is tax deductible According to Modigliani and Miller's theory of capital structure in a tax world shlh value of Firm B equal under equilibrium conditions? (Circle your answer, 2 , what points) a. $2,000,000 b, $2,150,000 c. $2,500,000 d. $1,500,000 UCT 26. Firm XYZ had the following values for EBIT, Depreciation and Taxes for this year EBIT Depreciation Taxes This year $14,000,000 $3,000,000 $2,000,000 3 Firm XYZ's operating net cash flow is: (Circle your answer, 2.5 points) a. $15,000,000 b. $12,000,000 c. $9,000,000 d. $13,000,000 42 46