Company A and B differ ONLY in their capital structure. A is financed 20% debt and 80% equity and B is financed 10% debt and 90%. equity. The debt of both companies is risk-free, Notations: Firm Value: firm A= firm B=V Profit: firm A= firm B = profit Firm A debt value : D(A) Firm B debt value : D(B) free rate of return : rr R. Ray owns 10% of the common stock of firm B. What other investment package would produce identical cash flow for Ray? Show the two investment strategies are identical. And discuss why you can construct an investment package with the identical cash flow, (7 points) For Firm B, the cost of equity is 10% and the cost of debt is 4%, assuming there is no corporate tax, what is the cost of equity for firm A? Compare the cost of equity for firm A and firm B and discuss the difference if any. (3 points)