The total firm value of a firm with market value of debt 45 million and the market value of equity 105 million, will be 150 million.
The simple formula to calculate the total firm value is-
Fund value = Market Capitalization + Market Value of Debt – Cash and Equivalents
As Market Capitalization = market value of equity
So Firm value =105 million(Market Capitalization)+45 million(Market Value of Debt)- 0(Cash and Equivalents) = 150 million
However Cash and Equivalents are not given so we have to add market capitalization and market value of debt only.
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