Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt of $$1,000$ on which it pays interest of $8\%$ each year. Both companies have identical projects that generate free cash flows

of $$1,000$ or $$1,100$ each year. After paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year.

a$.$ In the table below, fill in the debt payments and equity dividends each firm will receive given each of the two possible levels of free cash flows.

b$.$ Suppose you hold $10\%$ of the equity of ABC. What is another portfolio you could hold that would provide the same cash flows?

c$.$ Suppose you hold $10\%$ of the equity of XYZ$.$ If you can borrow at $8\%,$ what is an alternative strategy that would provide the same cash flows?