CORPORATE FINANCE$-$ REALLY URGENT a$)$ A firm has the balance sheet: Assets $=$$$100$ million and a $40\%-$debt $60\%-$equity

capital structure. The firm considers re$-$structuring capital to a $70\%-$debt $30\%-$

equity structure. Write the current and the future $($under$-$consideration$)$ balance

sheets. $[2\mathrm{.}5$ marks$]$

b$)$ What particular purchases and$/$or sales of securities should of the firm make to

attain the new capital structure? $[2\mathrm{.}5$ marks$]$

c$)$ Suppose the Return on Assets is expected to be equal to $30\%$ in both capital

structures. What would be the expected increase$/$decrease on the Return on Equity

from the capital restructuring? Justify your answer. $[2\mathrm{.}5$ marks$]$

Suppose the Return on Assets is expected to be equal to $30\%$ and the price of

stock $$10$ per share in both capital structures. What would be the expected

increase$/$decrease on the Earnings Per Share from the capital restructuring?.

ustify your answer. $[2\mathrm{.}5$ marks$]$