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? Group of answer choices 0.23 0.3 0.21 0.7

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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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?

Group of answer choices
0.23
0.3
0.21
0.7
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