Consider two firms U and L identical in all aspects except the financing mix. Firm U is an all-equity firm and L has a perpetual debt of S2000 (at interest rate of 8%). Both firms are zero-growth firms with an expected NOI of $2000. Firm U has a cost of capital of 12%. Tax rate is 25% for both U and L The Present value for expected financial distress and bankruptey cost are $300. What is the difference in the values of firm U and L? 200 O 300 O 700 500