Question: Foundation, Incorporated, Is comparing two different capital structures, an all - equity plan ( Plan I ) and a levered plan ( Plan II )
Foundation, Incorporated, Is comparing two different capital structures, an allequity plan Plan I and a levered plan Plan II Under Plan I, the company would have shares of stock outstanding. Under Plan II there would be shares of stock outstanding and $ million In debt outstanding. The Interest rate on the debt Is percent, and there are no taxes.
a Use M&M Proposition I to find the price per share.
Note: Do not round Intermedlate calculatlons and round your answer to declmal places, eg
b What is the value of the firm under each of the two proposed plans?
Note: Do not round Intermedlate calculations and round your answers to the nearest whole number, eg
tablea Share price,b Allequity firm value,Levered plan firm value,
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