Steinberg Corporatio and Dietrich Corporation are identical firms except that Dietrich Corp. is more levered. Both companies will remain in business for one more year. The companies' economists agree that the probability of the continuation of the current expansion is 70 percent for the next year and the probability of a recession is 30 percent. If the expansion continues, each firm will generate EBIT of $4 million. If a recession occurs, each firm will generate an EBIT of $1.4 million. Steinberg's debt obligation requires the firm to pay $940,000 at the end of the year. Dietrich's debt obligation requires the firm to pay $1.5 million at the end of the year. Neither firm pays taxes. Assume a discount rate of 15 percent. What is the value today of Steinberg's debt and equity? What is the value today of Dietrich's debt and equity? Steinberg's CEO recently stated that Steinberg's value should be higher than Dietrich's because the firm has less debt and therefore less bankruptcy risk. Do you agree or disagree with this statement?