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 COGS is 65% of net sales and that the company uses a marginal income tax rate of 35%.

firm A firm B

net sales $5000 5000

COGS

Gross profit 1750 1750

operating expenses (300) (300)

EBIT 1450 1450

Interest Expensse

EBT

income Tax @35%

Net income 942 927

Earning per share

Dividend per share

Expected return on equity

Estimated share price

Market value of debt

Enterprise value 6691 5976

EBITDA

Free cash flow

share outstanding 600 300

cost of debt 6% 8%

Beta 1.20 1.50

Expected return on market 8% 8%

Dividend pay-out ratio 40% 40%

Dividend growth 3% 3%

Risk free 4% 4%

Debt outstanding (book value) $- $500

Common equity (book value) $600 $300

company's debt trading @ n/a 104

change in working capital $(30) $(25)

capital expenditure $(40) $(45)

Depreciation expense $20 $20