Debt Irrelevance . Companies A and B differ only in their capital structure . A is financed 30 debt and 70 % equity B is financed 10 % debt and 90 equity . The debt of both companies is risk - free . ( LO16-1 a Rosencrantz owns 1 of the common stock of A. What other investment package ( involving shares in company B ) would produce identical cash flows for Rosencrantz Guildenstern owns 2 % of the common stock of B. What other investment package ( involving shares in company A ) would produce identical cash flows for Guildenstern