For both companies the tax rate is $23\%.$

a$)$ What is the asset value of Company A and Company B$?[8$ Points$]$

b$)$ What is the share price of Company A and Company B$?[5$ Points$].$ Answer

Answers below consider the tax saving induced by the losses of Comp. B in year $1$ and

$3.$ The asset value for Comp. B can be obtained not considering tax savings in year $1$

and $3($not reported below$),$ this is also considered correct.

a$)$ A: $15,531,229\mathrm{.}81$; B: $4,945,204\mathrm{.}44$

b$)$ PA$=25\mathrm{.}10$; PB$=49\mathrm{.}45$