.

4. Lolas Dance Studio currently has debt outstanding with a market value of $100,000 and a cost of 8 percent. The company has EBIT of $8,000 that is expected to continue in perpetuity. Assume there are no taxes.

I. What is the value of the company's equity?

I. What is the debt-to-value ratio?

I. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent?

I. What are the equity value and debt-to-value ratio if the company's growth rate is 7 percent?