Companies A and B differ only in their capital structure. A is financed 30% with riskless debt and 70% with equity; B is financed entirely with equity. Both companies operate in a perfect capital market and earn $200,000 of operating income each year. Assume both A and B have a market value of $ 1M and 10,000 shares outstanding. Risk-free interest rate is 10%.

* Mr. Y can buy 2% of B's equity for $20,000. Find another $20,000 portfolio that would produce identical cash flows for him using stock A and riskless borrowing or lending. (You must prove identical cash flows to earn credit!)