Question 3 (50 marks] Firms A and B are identical except for their capital structure. A carries no debt, whereas B carries 200m of debt on which it pays a 6% interest rate. Assume no transaction costs, no taxes and risk- free debt. The relevant numbers are provided in the following table (in m): A Value of Firm 200 250 Debt 200 Equity Earnings before interest 22 22 Interest payment Interest rate NA 6% Earnings after interest Return on Equity Debt/Equity Ratio Cost of Capital Version 1 Page 3 of 4 a. Reproduce the above table in your answer booklet filling the blank spaces. b. Consider an investor holding a stake y, 0