Question: i need help solving problems A through D Companies U and L are identical in every respect except that U is unlevered while L has

i need help solving problems A through D i need help solving problems A through D Companies U and L

Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 8% bonds outstanding. Assume: (1) All of the MM assumptions are met. (2) Both firms are subject to a 25% federal-plus-state corporate tax rate. (3) EBIT is $3 million. (4) The unlevered cost of equity is 12% a. What value would MM now estimate for each firm? (Hint: Use Proposition 1.) Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Round your answers to two decimal places. Company U: $ million Company L: $ b. What is ts for Firm U? Round your answer to one decimal place. million What is rs for Firm L? Do not round Intermediate calculations, Round your answer to one decimal place. Find Su and then show that Su+D - Vresults in the same value as obtained in Parta.Enter your answers in millions. For example, an answer of $10,550,000 should be entered 10.55. Do not round intermediate calculations. Round your answers to two decimal places. SL=5 million 5D=$ million d. What is the WACC for Firm U? Do not round intermediate calculations. Round your answer to two decimal places what is the WACC For Firm L? Do not round Intermediate calculations. Round your answer to two decimal places Chock My Work (10 remaining)

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