Question: [1] Explain how the following table (TABLE 14.6) can prove MM Proposition I, using the information in the table. (7 points) Date 0 Date 1:

[1] Explain how the following table (TABLE 14.6) can prove MM Proposition I, using the information in the table. (7 points) Date 0 Date 1: Cash Flows Initial Cost Strong Economy Weak Economy Unlevered equity $1000 $1400 $900 Margin loan -$500 -$525 --$525 Levered equity $500 $875 $375

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