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Edwards Construction currently has debt outstanding with a market value of $450,000 and a cost of 8 percent. The company has an EBIT of $36,000
Edwards Construction currently has debt outstanding with a market value of $450,000 and a cost of 8 percent. The company has an EBIT of $36,000 that is expected to contiune in perpetuity. Assume there are no taxes. What is the value of the company's equity and the debt to value ratio? What is the equity value and the debt-to-value ratio if the company's growth rate is 3 percent? What is the equity value and the debt-to-value ratio if the company's growth rate is 5 percent?
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