Fezziwig International (FI) has been in the haberdashery business since 1869. It is an all-equity firm. At the end of the current year, Mr. Fezziwig expects EBIT to be $1.755M and the same earnings are expected annually in perpetuity. The company is not growing so CAPEX and investments in net working capital are zero. The cost of equity for Fl is 9%. An identical firm to FI, Skimpole Sewing (SS), has $5.5M of long-term debt outstanding. What is the value of SS's equity? The corporate tax rate is 50%. Assume that Modigliani \& Miller assumptions hold. $7.0M $7.5M $6.5M $8.0M