QUESTION 2 : Asher Limited and Jun Yung Inc . are identical firms in all respects except for their capital structure . Asher is an all equity firm with $100 ,000, 000 in stock . Jun Yung uses both stock and perpetual debt . Jun Y ung has debtiequity ratio of 2/3 and on its debt it pays 7% interest per year . Both firms expect EBIT to be $15,000, 000. Ignore taxes . a. Ashley owns $100, 000 worth of Asher Limited stock . What cash flow and the rate of return is she expecting ?" b . Show how she could generate exactly the same cash flows and the rate of return by investing in Jun Y ung Inc . and using homemade unleverage . C . What is the cost of equity for Asher ? For JunYung? d . What is the Iwacc for Asher ? For Jun Yung ? What is your conclusion ?"