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Q1. Home-made Leverage - Refer to Table 1 and Table 2 of the lecture note for chapter 16 Capital structure. In the lecture note, we

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Q1. Home-made Leverage - Refer to Table 1 and Table 2 of the lecture note for chapter 16 Capital structure. In the lecture note, we assumed that Mr. Modigliani borrows $200 at 4% interest to buy back the firm's shares. For this homework, assume that Mr. Modigliani borrow $400. Based on the $400 borrowing. you need to re-do Table 2, and Table 3 (home-made leverage). For your home-made leverage, assume that the total amount of your portfolio (which includes your investment in stocks and all other transactions) is $100. Show one decimal place for this answer. What is the "equity earnings" in state 3 in new Table 2

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