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Equity Financing (LG2-1) You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, Inc.), both of which operate in the

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Equity Financing (LG2-1) You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, Inc.), both of which operate in the same Industry and have identical EBITDA of $39.2 million and operating income of $17.5 million. NoEquity, Inc, finances its $70 million in assets with $69 million in debt (on which it pays 10 percent interest annually and $1 million in equity, NoDebt, Inc. finances i 570 million in assets with no debt and $70 million in equity. Both firms pay a tax rate of 21 percent on their taxable income Calculate the net income and return on assets-funders investments-for the two firms. (Enter your dollar answers in millions of doilars. Round "Net Income" answers to 3 decimal places and Return on assets" answers to 2 decimal places.) Answer is complete but not entirely correct. $ NoEquity 8,370 million 11.97% $ NoDebt 13.830 milion 19.78%

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