Question: Consider two firms that are the same in every aspect, except one is levered and the other is unlevered. The Federal Reserve announces that it

Consider two firms that are the same in every aspect, except one is levered and the other is unlevered. The Federal Reserve announces that it will lower the benchmark interest rate in response to the pandemic. How will this affect the value of the levered firm and the unlevered firm? Explain the effects on each firm separately.

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