Blue Sky Softwares Limited $($BSSL$)$ and Delta Software Consultants Limited $($DSCL$)$ are identical firms in every way except their capital structures. BSSL is an all$-$equity firm and has $18,000$ shares of stock outstanding. The current price is $$35$ per share. The other company, DSCL$,$ uses leverage in its capital structure. The market value of DSCL$\text{'}$s debt is $$85,000,$ and its cost of debt is $9$ percent. Each firm is expected to have an EBIT of $$93,000$ in perpetuity. Ignore Taxes. Assume that every investor can borrow at $9$ percent per year.

a$)$ What is the value of Blue Sky Softwares Limited?

b$)$ What is the value of Delta Software Consultants Limited?

c$)$ What is the market value of DSCL$\text{'}$s equity?

d$)$ How much will it cost to purchase $20$ percent of each firm's equity?

e$)$ Assuming each firm meets its earnings estimates, what will be the dollar return to each position in part $($d$)$ over the next year?

f$)$ Construct an investment strategy in which an investor purchases $20$ percent of BSSL$\text{'}$s equity and replicates both the cost and dollar return of purchasing $20$ percent of DSCL$\text{'}$s equity.

g$)$ Is BSSL$\text{'}$s equity riskier or less risky than DSCL$\text{'}$s equity? Explain

h$)$ Explain the relevance of Modigliani$-$Miller Propositions I and II in capital structure decisions.