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6. a. An unlevered firm (U) has an EBIT of $2 million, which is expected to remain constant indefinitely. Its cost of capital is 10

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6. a. An unlevered firm (U) has an EBIT of \$2 million, which is expected to remain constant indefinitely. Its cost of capital is 10 percent. What is the market value of this firm? b. An identical risk-levered firm (L) has $5 million in debt outstanding. What is the value of this firm, and what is the value of its equity

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