Hi,there! Here is the question 3, c?f ?and i ?need to be done in excel, thank you for your help~!!

Butta Plastics Inc. has grown from a family-controlled enterprise to an established firm in the sector of plastic containers productions and supplies. In the past, the firm has virtually used no financial leverage in financing its early-stage business operations. Now, as an established business, the firm forecasts its future annual earnings before interests and taxes (EBITs) to be stabilized at an average of $463,000 forever. The firm expects no growth in its EBITs as it will pay all the earnings in cash dividends to its shareholders. The asset beta of the firm has an estimated value of 1.32. The risk-free interest rate is 1.8%, and the market's return is 8.6%. The firm has 200,000 shares of common stock outstanding.

(Note: In your calculations, keep 4 decimals for your rate of return. e.g. 8.1234%)

Case I. Assume no tax and no default risk. a) What is the WACC of this firm if it is all-equity financed? What is the value of the firm? (3 marks) b) What would be the firm's value and overall cost of capital, if the firm uses $2,000,000 (market value) debt to generate its EBITs of $463,000? (4 marks) c) Complete the following table. (13 marks) Case I (T = 0) Value of Value of Value of RD RE WACC Firm Debt Equity 0 1.8% 400,000 1.8% 800,000 1.8% 1,200,000 1.8% 1,600,000 1.8% 2,000,000 1.8% 2,400,000 1.8% 1) With the help of EXCEL, plot a graph showing the relationship between financial leverage (D/E ratio) on the x-axis and cost of equity (RE) on the y-axis. 2) Plot a graph of financial leverage against overall cost of capital (WACC). 3) Plot a graph of financial leverage against firm value (VFirm). 4 What conclusion do you draw from each of these three graphs?Case II. Assume tax rate is 32% but no default risk. d) What is the WACC of this firm if it is all-equity financed? What is the value of the firm? (2 marks) e) What would be the firm's value and overall cost of capital, if the firm uses $2,000,000 (market value) debt in generating its EBITs of $463,000? (4 marks) f) Complete the following table. (13 marks) Case II (T = 32% Value of Value of Value of WACC ae a a Pas% | | se | | 800000 | tm || | | 4200000 | 8% | | | | 600,00) | 8% | | | | 2,000,000 | 8% | | | | 200,00) | 8% | | 1) 2) 3) 4) With the help of EXCEL, plot a graph showing the relationship between financial leverage (D/E ratio) on the x-axis and cost of equity (R=) on the y-axis. Plot a graph of financial leverage against overall cost of capital (WACC). Plot a graph of financial leverage against firm value (Vrirm). What conclusion do you draw from each of these three graphs? Case III. Assume tax rate is 32% and default risk is present. As default risk is present, the borrowing rate for the firm varies with its financial leverage as indicated in the following table. Case ITI (T = 32% Value of Beta of Debt Rp Equity 1.8% 1.32 g) What is the WACC of this firm if it is all-equity financed? What is the value of the firm? What is the market price per share of the firm? (3 marks) h) What would be the firm's value and overall cost of capital, if the firm uses $2,000,000 (market value) debt in generating its EBITs of $463,000? (4 marks) i) Complete the following table. (13 marks) ie Per fae y Equity | 1a% | | ee | 800,00 | tm | | 4,200,000 | 28% | | || 460000 | 42% | | | 2,000,000 | 6.6% | | | 2,400,000) | 8% || 1) 2) 3) 4) With the help of EXCEL, plot a graph showing the relationship between financial leverage (D/E ratio) on the x-axis and cost of equity (Rz) on the y-axis. Plot a graph of financial leverage against overall cost of capital (WACC). Plot a graph of financial leverage against firm value (V Firm). What conclusion do you draw from each of these three graphs? j) Case III. Based on your calculations above, which debt level would give the optimal capital structure for Butta Plastics? (1 mark) k) Suppose Butta Plastics follows your recommendation to modify its currently unlevered capital structure so as to achieve the optimally levered capital structure you have found above. The firm will issue debt and use the proceeds to repurchase some of its shares outstanding. In an efficient stock market, what should be the offer price to repurchase the shares? (2 marks) 1) What would be the share price after the capital restructuring? (2 marks) m) How better off are the shareholders of Butta Plastics following the optimal capital structure decision? i.e., what is the percentage change in the share price of the firm due to this capital restructuring? (1 mark)