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You are considering a stock investment in one of two firms ( AllDebt , Incorporated, and AllEquity, Incorporated ) , both of which operate in

You are considering a stock investment in one of two firms (AllDebt, Incorporated, and AllEquity, Incorporated), both of which operate
in the same industry and have identical EBITDA of $15.7 million and operating income of $7.5 million. AllDebt, Incorporated, finances its
$25 million in assets with $24 million in debt (on which it pays 10 percent interest annually) and $1 million in equity. AllEquity,
Incorporated, finances its $25 million in assets with no debt and $25 million in equity. Both firms pay a tax rate of 21 percent on their
taxable income.
Calculate the income available to pay the asset funders (the debt holders and stockholders) and resulting return on asset-funders'
investment for the two firms.
Note: Enter your dollar answers in millions of dollars. Round all answers to 3 decimal places.
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