Q2: The following are the cost of capital and values of the firms A & B according to the traditional approach: Total Value of the firm, V Market Value of Debt, D Market Value of Equity, E Expected Net Operating Income -Cost of Debt Net Income Cost of Equity, K, = NI/V Firm A 50,000 0 50,000 5,000 0 5,000 10% Firm B 60,000 30,000 30,000 5,000 1,800 3,200 10.70% Compute the equilibrium value for Firm A and B in accordance with the M-M approach. Assume that (i) taxes don't exist and (ii) the equilibrium value of K, is 9.09%.