Assume no synergy is created from the following merger. 1. Fill out the blanks. 2. Determine if there is any wealth transfer between debt- holders and equity-holders. Why or why not? State 1 State 2 Market Value Prob. 0.5 Base Case: Two all-equity firms merge Values before Merger Firm A 80 Firm B Values after Merger (Assume no synergy) Firm AB 0.5 20 120 30 0.5 State 1 State 2 Market Value Prob. 0.5 Case II: Two levered firms merge. Firm A has debt of $30 in face value, and firm B has debt of $50 in face value. Values before Merger Firm A 80 20 120 30 Debt Equity Firm B Debt Equity Values after Merger (Assume no synergy) Firm AB Debt Equity