Hello, I am stuck on this one. Will you please help? Pleaseshow as much work as possible so that I can really understand it.Thank you.

Here is the question containing 3 parts:

Medallion Cooling Systems, Inc., has total assets of$10,000,000, EBIT of $2,000,000, and preferred dividends of$200,000 and is taxed at a rate of 40%.

In an effort to determine the optimal capital structure, thefirm has assembled data on the cost of debt, the number of sharesof common stock for various levels of indebtedness, and the overallrequired return on investment:

Capital structure debt ratio	Cost of debt, kd	No. of common stock shares	Required return, ks
0%	0%	200,000	12%
15	8	170,000	13
30	9	140,000	14
45	12	110,000	16
60	15	80,000	20

1. Calculate earnings per share for each level ofindebtedness.

2. Use Equation Po = EPS/ks and theearnings per share calculated in part a to calculate a price pershare for each level of indebtedness.

3. Choose the optimal capital structure. Justifyyour choice.