1. Angelina Corporation wants to determine the optimal capital structure that will maximize the value of the company by restructuring its finances. The original capital structure has no debt with a firm value of $1,000,000 (in millions) and the four possibilities under the new capital structure are presented below:

	No debt	Proposed	Proposed	Proposed	Proposed
	(Original structure $000)	restructuring 1	restructuring 2	restructuring 3	restructuring 4
Debt	0	500,000	400,000	300,000	200,000
Equity	1,000,000	650,000	850,000	800,000	830,000
Firm value	1,000,000	1,150,000	1,250,000	1,100,000	1,030,000
Percentage of debt	0	43.48	32.00	27.27	19.42
Percentage of equity	100	56.52	68.00	72.73	80.58
Return to shareholders after restructuring	4.80%	10.10%	13.60%	6.10%	5.12%
Weighted average cost of capital (WACC)	15.80	9.50	9.30	10.20	14.50

Base only on the information in the table, should Angelina Corporation restructure the firm? Explain. If yes, which proposed capital structure do you recommend for Angelina Corporation and why?