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XYZ, Inc. is an all-equity firm, with 1 million shares outstanding that trade for a price of $19.95 per share. OPQ, Inc. on the other

XYZ, Inc. is an all-equity firm, with 1 million shares outstanding that trade for a price of $19.95 per share.

OPQ, Inc. on the other hand, has 2 million shares outstanding, and $10 million in debt (par value) which currently trade at 110.

Assume that both firms have identical assets and identical cash flows.

According to the MM Proposition I without tax, what would be the stock price per share for firm OPQ?

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