Question: Foundation Corporation is comparing two different capital structures, an all - equify plan ( Plean II and a levered plan ( Pan II ) .

Foundation Corporation is comparing two different capital structures, an all-equify plan (Plean II and a levered plan (Pan II). Under Plan I the company would have 200,000 shares of stock outstanding, Under Plan Il, there would be 115,000 shares of stock outstanding and $1.75 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes.
a. Use MM Proposition I to find the price der share. (Do not round intormediate calculations and round your answer to 2 decimal places, e.g,32,16.)
b. What is the value of the firm under each of the two proposed plans? (Do not round intermedlate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g.,1;234,567.)
\table[[a. Sharn price],[b. Al -gquily plant],[b. Lerecedildan]]
Foundation Corporation is comparing two different capital structures, an all-equify plan

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