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Calculate the Market Value of the following two firms. Firm U Firm L $1,000,000 $1,000,000 Total Capital Proportion of Debt Cost of equity, Ke 0%

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Calculate the Market Value of the following two firms. Firm U Firm L $1,000,000 $1,000,000 Total Capital Proportion of Debt Cost of equity, Ke 0% 50% 10% 13% 7% Cost of debt, Kd $100,000 $100,000 EBIT 40% 40% Tax rate

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