The following are selected financial information on Firm A and Firm B. You are asked to complete the table by methodically calculating the missing information. You will assume that Cost of Goods Sold (COGS) is 55% of Sales and that the company uses a marginal tax rate of 30% A B es 6,500 $ 6,500 11 Revenue COGS Gross Profit Operating Expenses EBIT Interest Expense Income Tax @ 30% 2,925 (780) 2,145 2,925 (780) 2,145 12 13 14 Net Income 1,502 1,487 15 Earnings per share $ $ 16 Dividend $ $ 17 Expected Return on Equity 18 Estimated Share Price 19 20 Market value of Equity Market Value of Debt Enterprise Value 8,042 7,133 $ $ 600 Outstanding Debt Shares Outstanding Cost of Debt Beta Expected return on Market Dividend pay-out ratio Dividend growth Risk free Common Equity 7% 2.00 8.5% 65% 3.0% 1.5% 700 300 300 7% 2.30 8.5% 65% 3.0% 1.5% 700 $ $ Company's debt trading @ n/a 105 21. Which Firm' shareholders are wealthier? Explain why! The following are selected financial information on Firm A and Firm B. You are asked to complete the table by methodically calculating the missing information. You will assume that Cost of Goods Sold (COGS) is 55% of Sales and that the company uses a marginal tax rate of 30% A B es 6,500 $ 6,500 11 Revenue COGS Gross Profit Operating Expenses EBIT Interest Expense Income Tax @ 30% 2,925 (780) 2,145 2,925 (780) 2,145 12 13 14 Net Income 1,502 1,487 15 Earnings per share $ $ 16 Dividend $ $ 17 Expected Return on Equity 18 Estimated Share Price 19 20 Market value of Equity Market Value of Debt Enterprise Value 8,042 7,133 $ $ 600 Outstanding Debt Shares Outstanding Cost of Debt Beta Expected return on Market Dividend pay-out ratio Dividend growth Risk free Common Equity 7% 2.00 8.5% 65% 3.0% 1.5% 700 300 300 7% 2.30 8.5% 65% 3.0% 1.5% 700 $ $ Company's debt trading @ n/a 105 21. Which Firm' shareholders are wealthier? Explain why