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Consider two firms, Zoe Corporation and Marley Company. Both corporations will either make $20,000 or lose $5,000 every year with equal probability. The firms' profits

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Consider two firms, Zoe Corporation and Marley Company. Both corporations will either make $20,000 or lose $5,000 every year with equal probability. The firms' profits are perfectly negatively correlated. If the corporate tax rate is 35%, what are the total expected after-tax profits if the two firms are combined into one corporation, assuming no tax-loss carryforwards or carrybacks? O A. $9,750 OB. $4,000 -rir O C. $8,000 OD. $15,000

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