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Suppose there are no taxes. Firm ABC has no debl, and firm XYZ has debt of $1,000 on which it pays interest of 8% each

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Suppose there are no taxes. Firm ABC has no debl, and firm XYZ has debt of $1,000 on which it pays interest of 8% each year. Both companies havo identical projects that generate free cash flows of $1,000 or $1,400 each year. Afre payang any interest on dobt, both companies use all remaing froe cash flows to pay dividends each year. a. In the table bolow, fill in the debt payments and equity dividends each firm will recelve given each of the two possibie levels of free cach flows. b. Suppese you hold 10K of the equity of ABC. What is another portfolio you could hold that would provide the same cash flowns? c. Suppose you hold 10% of the equily of XVZ. If you con borrow at B\%, what is an athemative strategy that would provide the sarne cash flows

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