Alpha and Beta Corp. are identical in every way except their capital structures. Alpha Corp. an all equity firm, has 13,000 shares of stock outstanding, currently worth $20 per share. Beta Corp. uses leverage in its capital structure. The market value of Beta's debt is $63,000 and its cost of debt is 8%. Each firm is expected to have earnings before interest of $73,000 in perpetuity. Neither firm pays taxes. Assume that every investor can borrow at 8% per year.

How much will cost to purchase 25% of each firms equty(d)? & Assuming each firm meets its earnings estimates, what will be the dollar return to each position in part(d) over the year?

e	Alpha
	Beta