Two firms have expected annual net operating income of $10,000 in perpetuity with identical operating conditions and business risk. Both firms are no-growth firms that pay out all earnings in common dividends. One firm is considering issuing $30,000 of long- term debt at a 10% interest rate. Assume perfect capital markets, no taxes, and that all investors can borrow at 10%. If investors are capitalizing the unlevered firm's common dividends at 15% and the levered firm's common dividends at 16%: a. What is the value of the unlevered firm? b. What is the value of the levered firm's equity? c. What is the WACC for the unlevered firm?