Question: Explain how the following table can prove MM Proposition I, using the information in the table? Unlevered equity Margin loan Levered equity Date 0 Initial

Explain how the following table can prove MM Proposition I, using the information in the table?

Unlevered equity Margin loan Levered equity Date 0 Initial Cost $1000 -$500

Unlevered equity Margin loan Levered equity Date 0 Initial Cost $1000 -$500 $500 Date 1: Cash Flows Strong Economy $1400 - $525 $875 Weak Economy $900 - $525 $375

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