You are given the following information: EBIT (for firms L and U in perpetuity) = $300,000; corporate tax rate (T) = 30%; cost of equity for firm U (K_su or r_su) = 10%; cost of debt for firm L (K_d or r_d) = 8%; level of debt for firm L (D) = $1,200,000.

What are the values of firm L (V_L) and firm U (V_u), respectively, using the M&M theory with corporate taxes (T= 30%)?

	1.	$2,460,000 (L), $1,200, 000 (U)
	2.	$2,100,000 (L), $2,100, 000 (U)
	3.	$2,460,000 (L), $2,460, 000 (U)
	4.	$2,460,000 (L), $2,100, 000 (U)