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Capital Structure and Growth Edwards Construction currently has debt outstanding with a market value of $340,000 and a cost of 6 percent. The company has

"Capital Structure and Growth Edwards Construction currently has debt outstanding with a market value of $340,000 and a cost of 6 percent. The company has an EBIT of $20,400 that is expected to continue in perpetuity. Assume there are no taxes. "

a. What is the value of the companys equity? What is the debt-to-value ratio?

b. What are the equity value and debt-to-value ratio if the companys growth rate is 2 percent?

c. What are the equity value and debt-to-value ratio if the companys growth rate is 4 percent?

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