1. Walkrun Inc. is unlevered and has a value of $700 billion. An otherwise identical but levered firm finances 40% of it

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1. Walkrun Inc. is unlevered and has a value of $700 billion. An
otherwise identical but levered firm finances 40% of its capital
structure with debt at a 6% interest rate. No growth is expected.
Assume the corporate tax rate is 25%. Use the MM model with
corporate taxes to determine the value of the levered firm. Enter
your answer in billions. For example, an answer of $1 billion
should be entered as 1, not 1,000,000,000. Round your answer to the
nearest whole number.
$ billion
2. Quillpen Company is unlevered and has a value of $35
billion. An otherwise identical but levered firm finances 25% of
its capital structure with debt. Under the MM zero-tax model, what
is the value of the levered firm? Enter your answer in billions.
For example, an answer of $1 billion should be entered as 1, not
1,000,000,000. Round your answer to the nearest whole number.