Edwards Construction currently has debt outstanding with a market value of $103,000 and a cost of 12 percent. The company has EBIT of $12,360 that is expected to continue in perpetuity. Assume there are no taxes.

1.

What is the value of the company's equity?

Value of equity?

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

Debt-to-value ratio?

b.What are the equity value and debt-to-value ratio if the company's growth rate is 4 percent?

Equity value?Debt-to-value?

c.What are the equity value and debt-to-value ratio if the company's growth rate is 8 percent?

Equity value?Debt-to-value?