Problem $17-5$ Capital Structure and Growth

Edwards Construction currently has debt outstanding with a market value of $$128,000$ and a cost of $12$ percent. The company has EBIT of $$15,360$ that is expected to continue in perpetuity. Assume there are no taxes.

a$-1.$

What is the value of the company's equity? $($Do not round intermediate calculations. Leave no cell blank $-$ be certain to enter $"0"$ wherever required.$)$

a$-2.$ What is the debt$-$to$-$value ratio? $($Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

b$.$ What are the equity value and debt$-$to$-$value ratio if the company's growth rate is $4$ percent? $($Do not round intermediate calculations and round your "Debt$-$to$-$value" answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$

c$.$ What are the equity value and debt$-$to$-$value ratio if the company's growth rate is $9$ percent? $($Do not round intermediate calculations and round your "Debt$-$to$-$value" answer to $3$ decimal places, e$.$g$.,32\mathrm{.}161.)$