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Currently the firm has 1 million shares outstanding, each sells for $20, total worth of shares: $20 million Currently firm has assets (buidings, equipment, patents

Currently the firm has 1 million shares outstanding, each sells for $20, total worth of shares: $20 million
Currently firm has assets (buidings, equipment, patents etc) worth $20 million. All financed by shares (called equity) and no debt.
The firm has an investment project requiring $10 million. There are 3 financing plans: all new equity, half & half, all debt
Fill in the YELLOW cells assuming the economy does POORLY and the firm realizes a 4% return on assets (ROA=0.04)
ROA= 0,04 FNANCNG PACKAGE FNANCNG PACKAGE interest rate on debt
1 2 3 1 2 3 0,1 10%
Operating Earnings in millions $1,20 $1,20 $1,20 Assets in millions $30,00 $30,00 $30,00
interest expense in millions $0,00 Debt $0,00
Earnings for owners in millions $1,2 Equity $30,00
Number of shares in millions # of shares in millions
Earnings per share EPS Debt/Equity Ratio
Debt/Assets Ratio

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