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You are considering a stock investment in one of two firms ( NoEquity , Incorporated, and NoDebt, Incorporated ) , both of which operate in
You are considering a stock investment in one of two firms NoEquity Incorporated, and NoDebt, Incorporated both of which operate in the same industry and have identical EBITDA of $ million and operating income of $ million. NoEquity, Incorporated, finances its $ million in assets with $ million in debt on which it pays percent interest annually and $ million in equity. NoDebt, Incorporated, finances its $ million in assets with no debt and $ million in equity. Both firms pay a tax rate of percent on their taxable income.
Calculate the net income and return on assetsfunders investmentsfor the two firms.
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