Colin's Kindle for Mac - Corporate Finance EES le 20. MM Proposition I without Taxes Alpha Corporation and Beta Cor- poration are identical in every way except their capital structures. Alpha Corporation, an all-equity firm, has 18,000 shares of stock outstanding, currently worth $35 per share. Beta Corporation uses leverage in its capital structure. The market value of Beta's debt is $85,000 and its cost of debt is 9 percent. Each firm is expected to have earnings before interest of $93,000 in perpetuity. Neither firm pays taxes. As- sume that every investor can borrow at 9 percent per year. O crosoft VerPoint cates both the cost and dollar return of purchasing 20 percent of Beta's equity le Chrome g. Is Alpha's equity more or less risky than Beta's equity? Explain