Part A:

Based on Yoshi's target capital structure, Proposal #4 will most likely:

a)increases the default risk of Yeta's debt

b) increase the agency conflict beyween Yeta's shareholders and managers

c) decreaee the agency conflict beyween Yeta's shareholders and bondholders?

Part B.

the implementation of Proposal #4 would likely signal to Lakin and other investors that future earnings growth can be expected to:

a) increase

b) remain unchanged

c) increase

Please show work.

FINC 3314 Corporate Finance Assignment Dividends and Share Repurchases Lone Problem: Answer the following questions based on this text below. Josh Lakin is an analyst in the research department of an international securities firm. Lakin is currently analyzing Yoshi Products, a publicly traded global consumer goods company located in the United States. Selected data for Yoshi are presented in Exhibit 1 Exhibit1 Selected Financial Data for Yeta Products Current Pretax income $380 million Share outstanding Rooke per share Share pe Cashew from operations Capital expenditur Tarning peshare 1235 milion 175 milli Yosh currently does not pay a dividend, and the company operates with a target capital structure of 40% debt and 60% equity. However, on a recent conference call, Yoshi's management indicated that they are considering four payout proposals: Proposal 81: Issue a 10% stock dividend. Proposal 2: Repurchase $40 million in shares using idle cash. Proposal): Repurchase $10 million in shares by borrowing 540 million at an after-tax cost of borrowing of 8.50% Proposal 14: Initiate a regular cash dividend based on a residual dividend policy. Write the correct answer choice inside the box (A, B, or provided below. and then explain your answer in the space