Aaron Levie is the co-founder of Box. Assume
that his company currently has $250,000 in equity, and he is
considering a $100,000 expansion to meet increased demand. The
$100,000 expansion would yield $16,000 in additional annual income
before interest expense. Assume that the business currently earns
$40,000 annual income before interest expense of $10,000, yielding
a return on equity of 12% ($30,000/$250,000). To fund the
expansion, he is considering the issuance of a 10-year, $100,000
note with annual interest payments...