Problem $17-5$ Capital Structure and Growth

Edwards Construction currently has debt outstanding with a market value of $$104,000$ and a cost of $12$ percent. The company has EBIT of $$12,480$ that is expected to continue in perpetuity. Assume there are no taxes.

a$-1.$ What is the value of the company's equity? $($Do not round intermediate calculations. Leave no cell blank $-$ be certain to enter $"0"$ wherever required.$)$

a$-$ What is the debt$-$to$-$value ratio? $($Do not round intermediate calculations and round

$2.$ your answer to the nearest whole number, e$.$g$.,32.)$

b$.$ What are the equity value and debt$-$to$-$value ratio if the company's growth rate is $6$ percent? $($Do not round intermediate calculations and round your "Debt$-$tovalue" answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

c$.$ What are the equity value and debt$-$to$-$value ratio if the company's growth rate is $10$ percent? $($Do not round intermediate calculations and round your "Debt$-$tovalue" answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

$\backslash$table$[[$a$-1.$ Value of equity,$],[$a$-2.$ Debt$-$to$-$value ratio,$],[$b$.$ Equity value,$1],[$b$.$ Debt$-$to$-$value,$],[$c$.$ Equity value,$0\mathrm{.}000],[$c$.$ Debt$-$to$-$value,$]]$