2. Suppose that the Matrix Corporation has $120 million of assets, all financed with equity, and that the firm has 6 million shares of stock outstanding valued at $40 per share. Suppose further that management has identified investment opportunities requiring $60 million of new funds and can raise the funds in one of the following three ways: Financing package 1: Financing package 2: Financing package 3: Issue $60 million equity (3,000,000 shares of stock at $40 per share) Issue $30 million of equity (1,500,000 shares of stock at $40 per share) and borrow $30 million with an annual interest of 8% Borrow $60 million with an annual interest of 8% a. Complete the following table for each financing package after the financing capital structure is completed: Financing Assets package 1 (millions) Debt Equity No. of shares Debt-to-equity (millions) Debt-to- ratio assets ratio 2 3 b. Suppose the Matrix Corporation has $27 million of operating earnings. Show that the firm's return on assets is 15%. c. Assuming there are no taxes, compute the earnings per share for the three financing packages by completing the table below: Operating earnings in millions - Interest expense in millions Earnings available to owners in millions No. of shares in millions Earnings per share Financing package 1 2 3 $27.0 $27.0 $27.0 d. Complete the table below for each of the three financing packages based on three assumptions for the return on assets shown below: Assumed ROA 15% 12% 8% Financing package