Question: Rolston Corp. is comparing two different capital structures: an all-equity plan (plan I) and a levered plan (plan II). Under plan I, Rolston would have

Rolston Corp. is comparing two different capital structures: an all-equity plan (plan I) and a levered plan (plan II). Under plan I, Rolston would have 265,000 shares of stock outstanding. Under plan II, there would be 185,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on the debt is 10% and there are no taxes. What is price per share?

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