Question: 1) Complete the tables below using the following information about Petty enterprises: Petty currently has an all equity capital structure and is considering a new

1) Complete the tables below using the following information about Petty enterprises: Petty currently has an all equity capital structure and is considering a new structure with 30% debt. There are 3,000 common shares outstanding with a total market value of $150,000. The interest rate on the new debt will be 14%. Assume no taxes.

Old Structure = 100% Equity

EBIT

20,000

35,000

50,000

Interest

Net Income

New Structure = 75% Equity, 30% Debt

EBIT

20,000

35,000

50,000

Interest

Net Income

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