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c. compute the earnings per share for the three financing packages by completing the table below: Financial Package 1 2. 3 Operating earnings in million

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c. compute the earnings per share for the three financing packages by completing the table below: Financial Package 1 2. 3 Operating earnings in million interest expense in million Earnings available in million No. of Shares Earnings per share d. complete the table below for each of the three financing packages based on three assumptions for the return on assets shown below; Financial Packages Annual (ROA) 1 least leverage 2 3 most leverage 15% 10% 5% Consider a firm has $20 million of assets, all financed by equity. 100% equity financed, or unlevered. Suppose that there are one million outstanding shares of the firm, valued at $20 per share. If the firm's management identify investment opportunity requiring $10 million of new funds. The firm can raise the funds in one of the following three ways: 1. Issue $10 million equity 2. Issue $5 million equity and borrow $5 million 3. Borrow $10 million 4. Complete the following table for each financing package after the financing capital structure is completed Financing Asset in package Million Debt in million Equity in million No. of Shares Debt- Debt-to to- equity asset ratio ratio Package 1 Package 2 Package 3 b. Suppose the Matrix Corporation has $4.5 million of operating earnings. Show that the firm's return on assets is 15% c. compute the earnings per share for the three financing packages by completing the table below: Financial Package 1 2. 3 Operating earnings in million interest expense in million Earnings available in million No. of Shares Earnings per share d. complete the table below for each of the three financing packages based on three assumptions for the return on assets shown below; Financial Packages Annual (ROA) 1 least leverage 2 3 most leverage 15% 10% 5% Consider a firm has $20 million of assets, all financed by equity. 100% equity financed, or unlevered. Suppose that there are one million outstanding shares of the firm, valued at $20 per share. If the firm's management identify investment opportunity requiring $10 million of new funds. The firm can raise the funds in one of the following three ways: 1. Issue $10 million equity 2. Issue $5 million equity and borrow $5 million 3. Borrow $10 million 4. Complete the following table for each financing package after the financing capital structure is completed Financing Asset in package Million Debt in million Equity in million No. of Shares Debt- Debt-to to- equity asset ratio ratio Package 1 Package 2 Package 3 b. Suppose the Matrix Corporation has $4.5 million of operating earnings. Show that the firm's return on assets is 15%

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