Current Plan A Plan B Plan Plan D Plan C Debt/Equity 1.5 2.33 1.86 1.22 0.82 kd(after-tax) 5.0% 8.5% 6.2% 4.4% 3.9% ke 12.0% 16.0% 13.5% 11.2% 10.9% Expected EPS $5.67 $6 $6.33 $5.47 $4.89 Payout ratio 45% Growth rate 6.1% Stock price $43 Which financing plan is more compatible with value maximization? Plan B Plan C He should stick with the current plan. Plan A Plan D Industry Average 1.27 5.9% 12.8% $6.31 42% 5.9%