Problem $13-8$ Homemade Leverage $[$LO$1]$

Finch, Incorporated, is debating whether or not to convert its all$-$equity capital structure to one that is $30$ percent debt. Currently, there are $14,000$ shares outstanding and the price per share is $$59.$ EBIT is expected to remain at $$58,800$ per year forever. The interest rate on new debt is $5\mathrm{.}5$ percent, and there are no taxes.

a$.$ Allison, a shareholder of the firm, owns $200$ shares of stock. What is her cash flow under the current capital structure, assuming the firm has a dividend payout rate of $100$ percent?

Note: Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

b$.$ What will Allison's cash flow be under the proposed capital structure of the firm? Assume she keeps all $200$ of her shares.

Note: Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

c$.$ Assume that Allison unlevers her shares and re$-$creates the original capital structure. What is her cash flow now?

Note: Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

$\backslash$table$[[$a$.$ Cash flow,$],[$b$.$ Cash flow,$],[$c$.$ Cash flow,$]]$