Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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PLease answer q no workings required

Edwards Construction currently has debt outstanding with a market value of $75,000. The
company has a WACC of 10 percent. Tax rate is 20%. The company just released its EBIT of $8,750
for the preceding financial year (t = 0). What is the debt-to-value ratio if the company's growth rate
is 7 percent?
0.21
0.3
0.23
0.7
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Transcribed Image Text:Edwards Construction currently has debt outstanding with a market value of $75,000. The company has a WACC of 10 percent. Tax rate is 20%. The company just released its EBIT of $8,750 for the preceding financial year (t = 0). What is the debt-to-value ratio if the company's growth rate is 7 percent? 0.21 0.3 0.23 0.7
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