Finch, Incorporated, is debating whether or not to convert its all$-$equity capital structure to one that is $30$ percent debt. Currently, there are $9,000$ shares outstanding and the price per share is $$64.$ EBIT is expected to remain at $$40,500$ per year forever. The interest rate on new debt is $8\mathrm{.}5$ percent, and there are no taxes.

Allison, a shareholder of the firm, owns $300$ shares of stock. What is her cash flow under the current capital structure, assuming the firm has a dividend payout rate of $100$ percent?

What will Allison$$s cash flow be under the proposed capital structure of the firm? Assume she keeps all $300$ of her shares.

Assume that Allison unlevers her shares and re$-$creates the original capital structure. What is her cash flow now?