Soho Ltd and Seine Ltd are identical in every way except their capital structures. Soho Ltd, an all equity firm, has 10,000 shares of stock outstanding, currently worth $18 per share. Seine Ltd uses leverage in its capital structure. The market value of Seines debt is $60,000 and its cost of debt is 12 percent. Each firm is expected to have earnings before interest of $35,000 in perpetuity. Neither firm pays taxes. Assume that every investor can borrow at 12 percent per year. Required: (d) Construct an investment strategy in which an investor purchases 20 percent of Sohos equity and replicates both the cost and dollar return of purchasing 20 percent of Seines equity. (e) Jensens Free Cash Flow theory. Please explain what Jensen advocated, what its potentially positive effects are and what its potentially negative effects are.