Assume the M&M assumptions hold and no corporate taxes. Currently, AT&T is 75% equity and 25% debt. Their cost of equity is 15% and their cont of debt is 6%. David Einhorn, an activity investor, argues that increasing firm debt will increase firm value because the cost of debt is cheaper than the cost of equity. Do you agree with David Einhorn? Yes NO QUESTION 9 Assume the M&M assumptions hold WITH corporate taxes, ABC Corp and XYZ Inc have identical FCF and identical firm risks. However, ABC Corp is all equity financed, while XYZ Inc is financed 50% by equity and 50% by debt. Which of the following is true? (Select all the apply) XYZ Inc has a higher enterprise value than ABC Corp XYZ Inc has the same enterprise value as ABC Corp XYZ Inc has a higher cost of equity than ABC Corp XYZ Inc has a lower cost of equity than ABC Corp