The annual discount rate is 12%

Question 3 25 pts Air Taxi, Inc. and Wing Air, Inc. are identical in e e levered firm. Both companies expect to remain in business for one more year Here are the economist projections for the next year: Probability of expansion Probability of recession Expansion EBIT Recession EBIT Air Taxi debt payment 75% 25% $3,700,000 $2,100,000 $850,000 Wing Air debt payment $1.300,000 12% Annual discount rate What is the value of each firm's debt and equity? Upload this spreadsheet template with your