Assume Miller and Modigliani $\text{'}58$ holds. Company A is an unleverd firm. Company B is

identic to company A however they are funded with $50,000$ debt at $4\%$ interest rate. Both

companies have an EBIT of $20,000.$ Company A has a wacc of $5\%.$

Required:

a$.$ Calculate the value of equity for company $A.$

b$.$ Calculate the value of equity for company $B.$

c$.$ calculate the cost of equity for company B$.$