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If Firm U Is Unlevered and Firm L Is Levered

Question 68

Multiple Choice

If firm U is unlevered and firm L is levered, then which of the following is true?
I.V_U = E_U.
II.V_L = E_L + D_L.
III.V_L = E_U + D_L.

A) I only
B) I and II only
C) I, II, and III
D) III only

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