Question 11. Thank you for the help, please comment if you need anything.

Dickinson Company nas Sl 1 million in assets. Currently nalt ot these assets are financed witn long-term debt at 91 percent and nalt with common stock having a par value of $8. Ms. Smith, Vice President ot Finance, wishes to analyze two refinancing plans, one witn more debt (D) and one witn more equity (E). The company earns a return on assets before interest and taxes ot 9.1 percent. The tax rate is 40 percent Tax loss carryover provisions apply, so negative tax amounts are permissable_ Under Plan D, a $2,955,000 million long-term bond would be sold at an interest rate ot 11.1 percent and 369,375 snares ot stock would be purchased in the market at S8 per share and retired Under Plan E, 369,375 snares ot stock would be sold at S8 per snare and the in proceeds would be used to reduce long-term debt. a. How would each ot these plans attect earnings per snare? Consider the current plan and the tv.co new plans. (Round your answers to 2 decimal places.) Current Plan Earnings per share Plan D Plan E b-1. Compute the earnings per snare if return on assets fell to 4.55 percent (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places.) Current Plan Earnings per share Plan D Plan E b-2. wnicn plan would be most tavorale it return on assets tell to 4.55 percent? Consider the current plan and the two new plans. O Current Plan O Plan E O Plan D