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58 Corporate Finance Corporate ﬁnancing and valuation Thus, investing 1% in the unlevered Firm U returns 1% of the profits. Similarly investing 1% in the
levered firm L also yields 1% of the profits. Since we assumed that the two firms generate the same cash
flow it follows that profits are identical, which implies that the value of Firm U...
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This note was uploaded on 10/26/2012 for the course 19 19 taught by Professor - during the Spring '12 term at Sunway University College.
- Spring '12