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Quillpen Company is unlevered and has a value of $80 billion. An otherwise identical but levered firm finances 25% of its capital structure with debt.

Quillpen Company is unlevered and has a value of $80 billion. An otherwise identical but levered firm finances 25% of its capital structure with debt. Under the MM zero-tax model (that is the original MM model with all of its assumptions), what is the value of the levered firm?

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