Air Taxi, Inc. and Wing Air, Inc. are identical in every way, except that Wing Air is a more levered firm. Both companies expect to remain in business for one more year. Here are the economist projections for the next year:

Probability of expansion	75%
Probability of recession	25%
Expansion EBIT	$3,700,000
Recession EBIT	$2,100,000
Air Taxi debt payment	$850,000
Wing Air debt payment	$1,300,000
Annual discount rate	12%

What is the value of each firm's debt and equity? VERIFY ANSWERS ALREADY INPUT AND FILL IN DEBT VALUE

Debt payment:
Expansion	$758,929
Recession	$758,929
Wing Air, Inc.
Equity payment
Expansion	$2,142,857
Recession	$714,286
Equity value	$1,785,714
Debt payment:
Expansion	$1,160,714
Recession	$1,160,714
Debt value	$
V(Air Taxi, Inc.)	$2,946,429
V(Wing Air, Inc.)	$2,946,429