Question: 2. Adding growth to the model Aa Aa Sunny Co. has a value of $30 million. Markus is otherwise identical to Sunny Co., but has

2. Adding growth to the model Aa Aa Sunny Co. has

2. Adding growth to the model Aa Aa Sunny Co. has a value of $30 million. Markus is otherwise identical to Sunny Co., but has $12 million in debt. Suppose that both firms are growing at a rate of 7%, the corporate tax rate is 36%, the cost of debt is 8%, and Sunny's cost of equity is 15% (assume rsu is the appropriate discount rate for the tax shield) Use the Modigliani and Miller theory extension for growth to complete the following table: Markus Co. Sunny Co. Value of the firm $30 million Value of the stock $30 million Cost of equity 15%

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