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Suppose Firm A and Firm B both had an EBIT of 100. Firm A is a levered firm but Firm B is not (i.e. Firm

Suppose Firm A and Firm B both had an EBIT of 100.

Firm A is a levered firm but Firm B is not (i.e. Firm A has debt while Firm B does not). All else equal, we expect Firm ____ to have a higher firm value than Firm ____.

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