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What is the rate of growth of equity capital

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Reference no: EM132489251

The financial information for Mary and William Spartan are stated below.

Assets $620,000

Liabilities 360,000

Returns to assets 68,200

Interest expense on debt 27,000

Income taxes 10,300

Consumption withdrawals 25,000

Question 1: What is the rate of growth of equity capital?

Question 2: How does your answer in question 1 change if the tax rate increases to 35%, but consumption remains at $25,000? Explain the difference from your answer in question 1.

Reference no: EM132489251

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