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Edwards Construction currently has debt outstanding with a market value of $99,000 and a cost of 8 percent. The company has EBIT of $7,920 that is expected to continue in perpetuity. Assume there are no taxes. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent? What are the equity value and debt-to-value ratio if the company's growth rate is 7 percent?

Financial Management, Finance

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