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The AB300 Company is identical to the BA720 Company (information in previous problem) in every respect save two: it is debt free and its cost

The AB300 Company is identical to the BA720 Company (information in previous problem) in every respect save two: it is debt free and its cost of equity is 11.5%.

a) What is the value of the AB300 Company?

b) Explain the difference in values for AB300 versus BA320.

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