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The following table has the equilibrium values for two firms M (Levered) and N (Unlevered) as per the Modigliani-Miller approach: Recompute the values for firms
The following table has the equilibrium values for two firms M (Levered) and N (Unlevered) as per the Modigliani-Miller approach: Recompute the values for firms M and N in accordance with the traditional theory. Assume that the cost of equity of firm M is 10 per cent and for firm N, it is 10.5 per cent.
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