*4. Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt...

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*4. Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt of $5000 on which it pays interest of 10% each year. Both companies have identical projects that generate free cash flows of $800 or $1000 each year. After paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year. ABC XYZ FCF $ 800 Debt Payments Equity Dividends Debt Payments Equity Dividends $1000 a. Fill in the table above showing the debt payments and equity dividends each firm will receive given each of the two possible levels of free cash flows. *4. Suppose there are no taxes. Firm ABC has no debt, and firm XYZ has debt of $5000 on which it pays interest of 10% each year. Both companies have identical projects that generate free cash flows of $800 or $1000 each year. After paying any interest on debt, both companies use all remaining free cash flows to pay dividends each year. ABC XYZ FCF $ 800 Debt Payments Equity Dividends Debt Payments Equity Dividends $1000 a. Fill in the table above showing the debt payments and equity dividends each firm will receive given each of the two possible levels of free cash flows.