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Excuse me, How to do this question?Thanks, please.the question in the picture. Calculation - Capital Structure Afnity Ltd plans to reduce debt through a $10

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Excuse me, How to do this question?Thanks, please.the question in the picture.

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Calculation - Capital Structure Afnity Ltd plans to reduce debt through a $10 million equity issue at $20 per share. The company is currently nanced by debt of $10 million with an interest rate of 6% pa. and 2,000,000 shares outstanding at a price of $20 each. The company forecasts EBIT to be $2 million. The company tax rate is 30%. Should Affinity change its capital structure? Stmcture - Current Structure - Proposed EBIT Interest paid Prot before tax Tax Prot after tax Mshares on issue 2M 2.5M Earnings per Share $0.49 $0.56

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