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 WELL and the firm realizes a 20% return on assets (ROA=0.2) interest rate on debt 0,1 10% 3 $30,00 $6,00 ROA= 0,2 FNANCING PACKAGE 2 Operating Earnings in millions $6,00 $6,00 interest expense in millions $0,00 Earnings for owners in millions $1,20 Number of shares in millions Earnings per share EPS FINANCING PACKAGE 1 2 $30,00 $30,00 $0,00 $30,00 Assets in millions Debt Equity # of shares in millions Debt/Equity Ratio Debt/Assets Ratio