Edwards Construction currently has debt outstanding with a market value of $320,000 and a cost of 5 percent. The company has an EBIT of $16,000 that is expected to continue in perpetuity. Assume there are no taxes.

1. What is the value of the companys equity and the debt-to-value ratio?
   1. Equity value $ 0
   2. Debt-to-value 1
2. What is the equity value and the debt-to-value ratio if the company's growth rate is 2 percent?
   1. Equity value $
   2. Debt-to-value
3. What is the equity value and the debt-to-value ratio if the company's growth rate is 4 percent?
   1. Equity value $
   2. Debt-to-value