In the M&M tax world, calculate the value of the unlevered firm (U) and the identical risk-levered

Question:

In the M&M tax world, calculate the value of the unlevered firm (U) and the identical risk-levered firm (L). Corporate tax rate = 20%; perpetual EBIT for U and L = $2 million; of U = 16%; L’s outstanding debt = $4 million; pre-tax = 5%. What is the WACC of L?

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