What is the value of the company equity and the debt

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Problem: Edwards Construction currently has debt outstanding with a market value of $430,000 and a cost of 6 percent. The company has an EBIT of $25,800 that is expected to continue in perpetuity. Assume there are no taxes.

a. What is the value of the company's equity and the debt-to-value ratio?

Equity Value: $

Debt-to-value: $

b. What is the equity value and the debt-to-value ratio if the company's growth rate is 4 percent? 

Equity value: $

Debt-to-value: $

c. What is the equity value and the debt-to-value ratio if the company's growth rate is 5 percent?

Equity Value: $

Debt-to-value: $

Reference no: EM132459456

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