Enoch-Arden Corporation has earnings before interest and taxes of $3 million and a 40 percent tax… 1 answer below »


Enoch-Arden Corporation has hues antecedently concern and taxes of $3 pet and a 40 percent tax objurgate. It is effectual to borrow at an concern objurgate of 14 percent, since its equity capitalization objurgate in the lack of borrowing is 18 percent. The hues of the crew are not expected to develop, and all hues are compensated out to shareholders in the contrive of dividends. In the intercourse of corpoobjurgate but no separate taxes, what is the esteem of the crew in an M&M earth after a while no financial leverage? After a while $4 pet in liability? After a while $7 pet in liability?