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MetaYou are considering a stock investment in one of two firms ( NoEquity , Inc., and NoDebt, Inc. ) , both of which operate in

MetaYou 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 $38.0 million and operating income of $29.5 million. NoEquity, Inc., finances its $40 million in assets with $39 million in debt (on which it pays 10 percent interest annually) and $1 million in equity. NoDebt, Inc., finances its $40 million in assets with no debt and $40 million in equity. Both firms pay a tax rate of 21 percent on their taxable income.
Calculate the net income and return on assetsfunders investmentsfor the two firms.

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