Dickinson Company has $$12,100,000$ million in assets. Currently hall of these assets are financed with long$-$term debt at $10.5$ percent and hall with common stock having a par value of $$8.$ Ms$.$ Park, Vice President of Finance, wishes to analyce two refinancing plans. one with more debt $($D$)$ and one with more equity $($E$).$ The company eams a retum on assets before interest and taces of $10S$ percent The tax rate is $40$ percent. Tax loss carryover provisions apply, so negative tax amounts are permissable.

Under Plan D$,$ a $$3,025,000$ million long$-$term bond would be sold at an interest rate of $12\mathrm{.}5$ percent and $378125$ shares of stock would be purchased in the market at $$8$ per share and retired.

Under Plan E$,378,125$ shares of stock would be sold at $$8$ per share and the $$3,025,000$ in proceeds would be used to reduce longterm debt.

a$.$ Compute earnings per share considering the currem plan and the two new plans.

Note: Round your answers to $2$ decimal places.

$\backslash$table$[[,$Ciment Plan,Pian D$,$Plan E$],[$Eamings per theme,,,$]]$

b$-1.$ Compute the earnings per share ir return on assets fell to $5\mathrm{.}25$ percent

Note: Negative amounts should be indicated by a minus sign. Round your answers to $2$ decimal places, Leave no cells blank be certain to enter o wherever required.

$\backslash$table$[[,$Current Plin,Plan D$,$PlanE$],[$Eanings per sthare,,,$]]$

b$-2.$ Wrich plan would be most fovorable ifreturn on assets fell to $525$ percent? Consider the current plan and the two new plans.

O piand

O PIanE

O Current Plan

b$-3.$ Compute the earnings per share if retum on ossets increased to $15\mathrm{.}5$ percent.

Note: Round your answers to $2$ decimal places.

$\backslash$table$[[,$Current Plan,Plan D$,$PlanE$],[$Cemings per stare,,,$]]$

b$-4.$ Which plan would be most fovorable if return on assets increased to $15\mathrm{.}5$ percent? Consider the current plan and the two new plans.

Pion E

Pion D

Q Current Plan

c$-1.$ If the market price for common stock rose to $$10$ before the restructuring, compute the earnings per share continue to assume that $$3,025,000$ million in debe will be used to retire stock io Plan $D$ and $$3\mathrm{.}025\mathrm{.}000$ million of new equity will be sold ta retire debt in Pian E$.$ Also ossume that retum on assets is $10$ s percent.

Nole: Aound your answers to $2$ decimal places.

$\backslash$table$[[,$Current Pien,Plan D$,$Plan E$],[,,,]]$

c$\mathrm{.}2.$ If the market price for common stock rose to $$10$ before the restructuring, which plan would then be most atractive?

OPIanE

O Current Plan

O Pian D