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Steinberg Corporation and Dietrich Corporation are identicalfirms except that Dietrich is more levered. Both companies willremain in business for one more year. The companies' economistsagree that the probability of the continuation of the currentexpansion is 80 percent for the next year, and the probability of arecession is 20 percent. If the expansion continues, each firm willgenerate earnings before interest and taxes (EBIT) of $3.3 million.If a recession occurs, each firm will generate earnings beforeinterest and taxes (EBIT) of $1.7 million. Steinberg's debtobligation requires the firm to pay $960,000 at the end of theyear. Dietrich's debt obligation requires the firm to pay $1.8million at the end of the year. Neither firm pays taxes. Assume adiscount rate of 10 percent.a-1. What are the current market values of Steinberg's equityand debt? (Enter your answers in dollars, not millions of dollars(e.g. 1,234,567). Do not round intermediate calculations and roundyour answers to the nearest whole dollar amount (e.g., 32).)Steinberg's Equity value $Debt value $a-2. What are the current market values of Dietrich's equity anddebt? (Enter your answers in dollars, not millions of dollars (e.g.1,234,567). Do not round intermediate calculations and round youranswers to the nearest whole dollar amount (e.g., 32).)Dietrich's Equity value $Debt value $b. Steinberg’s CEO recently stated that Steinberg’s value shouldbe higher than Dietrich’s because the firm has less debt, and,therefore, less bankruptcy risk. Do you agree or disagree with thisstatement?DisagreeAgree