Question: If someone could answer A and B I would appreciate it. Thanks! 5 ab x, x Arora 6. A firm has total assets of $10,000

If someone could answer A and B I would appreciate it. Thanks!

5 ab x, x Arora 6. A firm has total assets of $10,000 and an EBIT of $1,000 each year. The stock price is $10 per share and the firm's market value equals to its book value. Assuming no taxes. a. Unlevered firm: If the firm is 100% equity financed, how many shares of stocks are outstanding? What are the Return on Equity (ROE) and Earnings Per Share (EPS) for the firm? (3 points) b. Levered firm: if the firm is 50% debt financed with an interest rate of 10%, how many shares of stocks are outstanding? What are the Return on Equity (ROE) and Earnings Per Share (EPS) for the firm? (3 points) |

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