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You are considering a stock investment in one of two firms ( NoEquity , Inc., and NoDebt, Inc. ) , both of which operate in
You are considering a stock investment in one of two firms NoEquity Inc., and NoDebt, Inc. both of which operate in the same industry and have identical EBITDA of $ million and operating income of $ million. NoEquity, Inc., finances its $ million in assets with $ million in debt on which it pays percent interest annually and $ million in equity. NoDebt, Inc., 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. Enter your dollar answers in millions of dollars. Round "Net income" answers to decimal places and "Return on assets" answers to decimal places.
tableNoEquity,NoDebtNet income,million,nillionReturn on assets,
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