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Edwards Construction currently has debt outstanding with a market value of $ 6 0 , 0 0 0 and a cost of 6 percent. The
Edwards Construction currently has debt outstanding with a market value of $ and a cost of percent. The company has an EBIT of $ that is expected to continue in perpetuity. Assume there are no taxes, the company faces no distress costs, and investors are risk neutral.
a What is the value of the companys equity? What is the debttovalue ratio? Do not round intermediate calculations. Leave no cell blank be sure to enter wherever required. Omit $ sign in your response.
Value of equity $
Debttovalue ratio
b What are the equity value and debttovalue ratio if the companys growth rate is percent? Do not round intermediate calculations. Round "Debttovalue ratio" answer to decimal places. Omit $ sign in your response.
Value of equity $
Debttovalue ratio
c What are the equity value and debttovalue ratio if the companys growth rate is percent? Do not round intermediate calculations. Round "Debttovalue ratio" answer to decimal places. Omit $ sign in your response.
Value of equity $
Debttovalue ratio
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