Question: Finch, Incorporated, is debating whether or not to convert its all - equity capital structure to one that is 3 0 percent debt. Currently, there

Finch, Incorporated, is debating whether or not to convert its all-equity capital structure to one that is 30 percent debt. Currently, there are 13,000 shares outstanding and the price per share is $43. EBIT is expected to remain at $72,800 per year forever. The interest rate on new debt is 6.5 percent, and there are no taxes.
Allison, a shareholder of the firm, owns 200 shares of stock. What is her cash flow under the current capital structure, assuming the firm has a dividend payout rate of 100 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.
What will Allisons cash flow be under the proposed capital structure of the firm? Assume she keeps all 200 of her shares.
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.
Assume that Allison unlevers her shares and re-creates the original capital structure. What is her cash flow now?
Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.,32.16.

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