Question: 2. Adding growth to the model Baker Corp. has a value of $30 million. Tucci is otherwise identical to Baker Corp., but has $12 million

2. Adding growth to the model Baker Corp. has a value

2. Adding growth to the model Baker Corp. has a value of $30 million. Tucci is otherwise identical to Baker Corp., but has $12 million in debt. Suppose that both firms are growing at a rate of 5%, the corporate tax rate is 40%, the cost of debt is 6%, and Baker's cost of equity is 11% (assume Isu is the appropriate discount rate for the tax shield). Use the Modigliani and Miller theory extension for growth to complete the following table. (Note: Round all final answers to two decimal places.) Baker Corp. Tucci Co. Value of the firm $30 million Value of the stock $30 million Cost of equity 11%

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