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Amount Borrowed Value of Equity Value of the Firm Stock Price WACC EPS 0 18,460 18,460 18.46 13.0% 2.40 $ 2 Million 17,320 19,320 19.32

Amount Borrowed

Value of Equity

Value of

the Firm

Stock

Price

WACC

EPS

0

18,460

18,460

18.46

13.0%

2.40

$ 2 Million

17,320

19,320

19.32

12.42

2.55

$ 4 Million

15,830

19,830

19.83

12.10

2.70

$ 6 Million

14,020

20,020

20.03

11.99

2.54

$ 8 Million

16,570

24,570

24.57

11.50

3.04

$10 Million

12,000

22,000

22.00

12.00

3.20

NOTE: Value of the Firm is equal to the Amount Borrowed plus the Value of Equity

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