Please Explain Steps:
Company A and B both have the same EBIT of $3 million and tax rate of 30%. Company A is all-equity financed with a cost of capital of 12%, whereas Company B has debt of $7.5 million. What is Company B's firm value using the M&M Proposition?
Select one:
a. $15,250,000
b. $17,500,000
c. $19,750,000
d. $25,000,000
e. $27,250,000