Question: Return On Assets for No Equity. everything else is correct You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt,

Return On Assets for No Equity. everything else is correct
Return On Assets for No Equity. everything else is correct You are

You are considering a stock investment in one of two firms (NoEquity, Inc., and NoDebt, inc.), both of which operate in the same industry and have identical EBITDA of $39.6 million and operating income of $13.5 million. NoEquity, Inc, finances its 575 million in assets with $74 million in debt (on which it pays 10 percent interest annually) and 1 million in equity, NoDebt Inc, finances its $75 million in assets with no debt and $75 million in equity. Both firms pay a tax rate of 21 percent on their taxable income. Calculate the net income and return on assets-funders investments-for the two firms. (Enter your dollar answers in millions of dollars. Round "Net income" answers to 3 decimal places and "Return on assets" answers to 2 decimal places.) NoEquity 4.819 million $ $ Net income Return on assets NoDebt 10.665 million 14.22%

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