Question: Metal Corp is comparing two different capital structures, and all equity plan (Plan I) and a levered plan(Plan II). Under Plan I, the company would

Metal Corp is comparing two different capital structures, and all equity plan (Plan I) and a levered plan(Plan II). Under Plan I, the company would have 185,000 shares of stock outstanding. Under Plan II, there would be 135,000 shares of stock outstanding and 2.29 million in debt outstanding. The interest rate on the debt is 5 percent and there are no taxes.

a. USE MM Proposition I to find price per share?

b, What is the value of the firm under each of the two proposed plans? All Equity Plan ___________ Levered Plan_________

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