Question: Im done part 1, just need help with part 2. if theres anything wrong with my part 1 please let me know Levered (1) Company

Levered (1) Company Inc intends to raise $4 million for plant expansion. The company has an option of financing by way of either an equity issue (new shares), by selling shares at $40 per share or through a bond issue (debt financing) bearing an annual interest of 6%. The company's current capital structure consists of $20,000,000 in debt bearing 8% interest and $25,000,000 in equity. New capital injection will increase company's operating profits by 10%. Part 1: (6 marks) Calculate for each option the debt ratio, number of shares, EPS, ROE, ROA and TIE (Times Interest Earned). Show your calculations in the answer sheet. Part 2: (6 marks) Discuss the pros and cons of each financing option. Which option should the company choose? Debt Equity Shares Financing Scenarios Current Debt Equity 20,000,000 25,000,000 500,000 Operating Profit Interest Expense Earnings Before Tax Income tax @3056 Net Income 10,000,000 1,600,000 8,400,000 2,520,000 5.880,000 Debt Equity Shares Financing Scenarios Current Debt Equity 20,000,000 25,000,000 500,000 Operating Profit Interest Expense Earnings Before Tax Income tax @30 % Net Income 10,000,000 1,600,000 8,400,000 2,520,000 5,880,000 Debt Equity Shares Operating profit Interest expense Earning before tax Income tax @30% Net income EPS 11.76 ROE 23.52 TIE 6.25 Debt 24,000,000 25,000,000 500,000 11,000,000 1.840.000 9.160.000 2.748,000 6.412,000 12.82 25.65 5.98 Equity 20,000,000 29,000,000 600.000 11.000.000 1,600,000 9.400,000 2.800.000 6,580,000 10.97 22.69 6.88
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