Question: 4. Lolas Dance Studio currently has debt outstanding with a market value of $100,000 and a cost of 8 percent. The company has EBIT of

4. Lolas Dance Studio currently has debt outstanding with a market value of $100,000 and a cost of 8 percent. The company has EBIT of $8,000 that is expected to continue in perpetuity. Assume there are no taxes. I. What is the value of the company's equity? I. What is the debt-to-value ratio? I. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent? I. What are the equity value and debt-to-value ratio if the company's growth rate is 7 percent?

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